ÿþ<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html> <head> <title>partial cash settlement</title> <meta name="description" content="partial cash settlement"/> <meta name="keywords" content="partial cash settlement, buy-in, section 9.9, credit derivatives definitions, Physical Settlement Date, Buy-in Notice, Buy-in Date, Relevant Bonds, Buy-in Offers, Buy-in Price, Buy-in Period"/> <meta name="subject" content="A short article about buy-in procedures under section 9.9 of the credit derivatives definitions"/> <link href="home.css" rel="stylesheet" type="text/css"/> </head> <body> <div id="wrapper"> <div id="header"> <div id="NavBlock"> <div id="navcontainer"> <ul id="nav"> <li><a href="index.html" title="derivativeslawyer.com main page.">home &nbsp;::&nbsp;</a></li> <li><a href="aboutus.html" title="asbout derivativeslawyer.com.">about us &nbsp;::&nbsp;</a></li> <li><a href="derivativesarticles.html" title="derivatives articles and publications.">derivatives resources &nbsp;::&nbsp;</a></li> <li><a href="derivativeslinks.html" title="useful derivatives links.">links &nbsp;::&nbsp;</a></li> <li><a href="derivativesmap.html" title="road map to derivativeslawyer.com.">site map &nbsp;::&nbsp;</a></li> <li><a href="derivativescareer.html" title="succeed with derivativeslawyer.com.">career </a></li></ul></div> </div> <div id="content"> <div class="pageHeaderTop"><h2></h2></div> <div class="welcomeShadow1"> <div class="shadow2"> <div class="shadow3"> <!--ORANGE BOX--> <div id="welcomeContainer"> <h6>partial cash settlement</h6> <p>In a credit derivatives transaction where <a href="wp0004.html" target="_blank">Physical Settlement</a> applies, the buyer may only deliver such amount of the deliverable obligations specified in the <strong>Notice of Physical Settlement</strong>. Pursuant to 8.4 (8.3 in the 1999 definitions), if delivery is completed by the <strong>Physical Settlement Date</strong> (the last day of <strong>Physical Settlement Period</strong>), <strong>Termination Date</strong> will occurs and the Transaction completed.</P> <p>The buyer is however given more time (beyond the Physical Termination Date) under 9.2(c) to make delivery. Where the deliverable obligations are not bonds or loans, the buyer may continue to attempt to deliver up to 5 business days after the physical settlement date. In the case of bonds or loans, the buyer may continue to attempt to deliver after the physical settlement date, subject to the below. Please also note that the difference provision under the 1999 definitions.</P> <p>There are a few situations where it is possible for the parties to cash settle all or partially, including:</P> <p>(a) where it is illegal or impossible for the buyer to deliver all or part of the Deliverable Obligations on or before <strong>Latest Permissible Physical Settlement Date</strong> (see table below) (9.3);</P> <p>(b) where Consent Required Loans (9.4), Assignable Loans (9.5) or Participation (9.6) could not be delivered on or before the Latest Permissible Physical Settlement Date</P> <p>(c) <a href="wp0034.html">buy-in</a>.</P> In (a) or (b) above, Partial Cash Settlement Terms (9.8) will apply.</P> <br><br> <TABLE BORDER="1" CELLSPACING="0" CELLPADDING="10"> <CAPTION><h1>partial cash settlement table</h1></CAPTION> <TR VALIGN="TOP"> <TD ALIGN = "center"><h1><img src="/img/blank.gif"></h1></TD> <TD ALIGN = "center"><strong>9.3</strong></TD> <TD ALIGN = "center"><strong>9.4</strong></TD> <TD ALIGN = "center"><strong>9.5</strong></TD> <TD ALIGN = "center"><strong>9.6</strong></TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "center"><h1><img src="/img/blank.gif"></h1></TD> <TD ALIGN = "center"><strong>Impossibility and Illegality</strong></TD> <TD ALIGN = "center"><strong>Consent Required Loans</strong></TD> <TD ALIGN = "center"><strong>Assignable Loans</strong></TD> <TD ALIGN = "center"><strong>Participation</strong></TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><strong>Specified to be Applicable<strong></TD> <TD ALIGN = "left"><img src="/img/blank.gif"></TD> <TD ALIGN = "left">Partial Cash Settlement of Consent Required Loans</TD> <TD ALIGN = "left">Partial Cash Settlement of Assignable Loans</TD> <TD ALIGN = "left">Partial Cash Settlement of Participation</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><strong>Affected Reference Obligations<strong></TD> <TD ALIGN = "left">Undeliverable Obligations</TD> <TD ALIGN = "left">Undelivered Loan Obligations</TD> <TD ALIGN = "left">Unassignable Obligations</TD> <TD ALIGN = "left">Undelivered Participation</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><strong>Deliverable Obligations<strong></TD> <TD ALIGN = "left"><img src="/img/blank.gif"></TD> <TD ALIGN = "left">Consent Required Loans</TD> <TD ALIGN = "left">Assignable Loans</TD> <TD ALIGN = "left">Direct Loan Participations</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><strong>Latest Permissible Physical Settlement Date<strong></TD> <TD ALIGN = "left">30 calendar days after Physical Settlement Date</TD> <TD ALIGN = "left">15 Business Days after Physical Settlement Date</TD> <TD ALIGN = "left">15 Business Days after Physical Settlement Date</TD> <TD ALIGN = "left">15 Business Days after Physical Settlement Date</TD></TR> </TABLE> <a href="#top" title="Back to Top">^ </a> <br><br> <TABLE BORDER="1" CELLSPACING="0" CELLPADDING="10"> <CAPTION><h1>partial cash settlement terms</h1></CAPTION> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Cash Settlement Amount:</h1></TD> <TD ALIGN = "left">principle balance/Due and Payable Amount/Currency Amount x (Reference Price  Final Price)</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Cash Settlement Date:</h1></TD> <TD ALIGN = "left">= Termination Date and 3 BDs after calculation of Final Price</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Reference Obligation:</h1></TD> <TD ALIGN = "left">Affected Reference Obligation</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Reference Price:</h1></TD> <TD ALIGN = "left">100%</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Valuation Date:</h1></TD> <TD ALIGN = "left">2 BDs after Latest Permissible Physical Settlement Date</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Valuation Method:</h1></TD> <TD ALIGN = "left"> Highest unless <2 Full Quotations<br>If Weighted Average Quotation or Indicative Quotation applies,  Market </TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Quotation Method:</h1></TD> <TD ALIGN = "left">Bid</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Quotation Amount:</h1></TD> <TD ALIGN = "left">outstanding principle balance/Due and Payable Amount/Currency Amount</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Minimum Quotation Amount</h1></TD> <TD ALIGN = "left">Not applicable</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Valuation Time:</h1></TD> <TD ALIGN = "left">11:00 a.m. in the principal trading market of the Affected Reference Obligations unless specified</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Market Value:</h1></TD> <TD ALIGN = "left">> 3 Full Quotations, arithmetic, disregarding highest and lowest<br> 3 Full Quotations, remaining after disregarding highest and lowest<br> 2, arithmetic<br> < 2, if Weighted Average Quotation, Weighted Average Quotation<br> if 3 Indicative Quotations, Indicative Quotation after disregarding highest and lowest<br> < 2, if Weighted Average Quotation does not apply, 9.8(k)(ii)</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Quotation</h1></TD> <TD ALIGN = "left">Full Quotation, Weighted Average Quotation, Indicative Quotation (if applicable)</TD></TR> <TR VALIGN="TOP"> <TD ALIGN = "left"><h1>Indicative Quotation</h1></TD> <TD ALIGN = "left">each quotation for amount of the Undeliverable Obligation equal to Quotation Amount (only applicable to 9.3)</TD></TR> </TABLE> <a href="#top" title="Back to Top">^ </a> <br><br> <p>In the above cases, Termination Date of a transaction will occur the earliest of:</p> <p>(a) completion of delivery;</p> <p>(b) Cash Settlement Date in the case of 9.3, 9.4, 9.5 or 9.6.</p> <p>(b) the seller completes a  buy-in with respect to bonds under 9.9 (subject to the so call  60-business day cap )</p> <p>(c)  alternative delivery under 9.10 has been completed with respect to loans</p> <br><br> <h1>derivativeslawyer.com</h1> <p><strong>Last updated February 2007</strong></p> <a href="#top" title="Back to Top">^ </a> <p><i>The above notes are intended to provide only general outlines and, where applicable, should be read in conjunction with, and are qualified in their entirety by, the full provisions of the relevant ISDA provisions and definitions. They should never be used in place of professional advice. We accept no responsibility for any loss arising from any action taken or not taken by anyone using this material or using this material in conjunction with any ISDA documentation (where applicable) in reliance thereof.</i></p> <br><p><i>If you have any suggestion as to the topics you would like to read about, please let us know by e-mail to </i><a href="mailto:main@derivativeslawyer.com" title="We like to hear from you.">main@derivativeslawyer.com</a>.</P> </div></div></div></div> <!--START RIGHT COLUMN--> <div class="sidebar"> <table width="100" border="0" align="center" cellpadding="1" cellspacing="2"><tr> <td><a href="sponsors.html" target="_blank"><img src = "0081.jpg" alt="become a sponsor of derivativeslawyer.com" width="130" height="100" border="0" /> </a></td></tr></table> &nbsp;::&nbsp;<a href="sponsors.html" title="become a sponsor of derivativeslawyer.com">advertise with derivativeslawyer.com</a>&nbsp;::&nbsp; <br><br> <table width="100" border="0" align="center" cellpadding="1" cellspacing="2"> <tr><td><a href="templates.html" target="_blank"><img src = "9992.gif" alt="free document templates." width="145" height="120" border="0" /></a></td></tr></table> &nbsp;::&nbsp;<a href="templates.html" title="a handy resource of templates, documents and often used provisions">free templates</a>&nbsp;::&nbsp; </div></div> <!--FOOTER--> <div class="footerContainer"><div class="footer"> <div class="footerLinks">&copy; derivativeslawyer.com 2007 <a href="legal.html" title="legal">terms and conditions </a>&nbsp;::&nbsp; <a href="privacy.html" title="privacy">privacy and security</a> </div></div> </body> </html>