Obligations and deliverable obligations

Indra Rajaratnam

10.1 INTRODUCTION

This chapter sets out the types of obligations that would constitute an Obligation and Deliverable Obligations under the 2014 ISDA Credit Derivatives Definitions (henceforth the “2014 Definitions”; see International Swaps and Derivatives Association Inc. 2014b). The former defines the scope of obligations that can trigger a credit event, and the latter defines the scope of obligations that would be applicable to settling a transaction. This chapter begins with an overview of the definitions of “Obligation” and “Deliverable Obligation”. Specific rules on how these terms are to be assessed in the context of a “relevant guarantee” and certain types of transaction, including the additional conditions that must be satisfied for an obligation to constitute a Deliverable Obligation for the purposes of a Modified Restructuring (“Mod R”) or Modified Modified Restructuring (“Mod Mod R”) transaction, are explored. The chapter concludes with a brief discussion on the impact of certain additional provisions relating to Obligations and Deliverable Obligations, settlement completion issues of a delivery and the challenge process available to eligible market participants under

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