Repudiation/moratorium

Indra Rajaratnam

14.1 INTRODUCTION

This chapter provides insight into the conditions that need to be satisfied for a repudiation/moratorium to arise. This credit event applies to all sovereign and some emerging market corporate transaction types under the standard trading conventions set out in the Matrix (International Swaps and Derivatives Association Inc. 2022a), as described in Table 3.1. The chapter begins with an overview of this two-tier credit event, and then discusses the component conditions of a repudiation/moratorium, including the requirements of the repudiation/moratorium extension condition. A practical application of the relevant determination principles related to this credit event is also illustrated in the context of the Republic of Ukraine Deliberation (Repudiation/Moratorium) and by reference to some historical deliberations. The applicable event determination date that would apply when a repudiation/moratorium occurs is also covered. At the end of the chapter, an overview of the principles relevant to a determination of a repudiation/moratorium is presented via use of a decision tree as a checklist.

14.2 TWO-TIER CREDIT EVENT

The repudiation/moratorium credit event is

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