The basics of Loan-Linked ISDA Master Agreements

30-03-2009

The basics of Loan-Linked ISDA Master Agreements

Paul Harding has recently rewritten an article on Loan-linked ISDA Master Agreements and would like to share it with you.

A copy of this article can be downloaded by clicking on the link below:

The basics of Loan-Linked ISDA Master Agreements

DDL continues to offer consultancy services.  We can formulate a template for Loan-linked ISDA Master Agreements Schedules in line with clients’ policies and can aid in the negotiation of such Schedules. 

If you would like to talk to us about this service please contact us on +44 20 7060 1335 or email us on enquiries@derivsdocu.com

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The basics of Loan-Linked ISDA Master Agreements

Nowadays many ISDA® Master Agreements are loan-linked whether the loans are on a bilateral, club or syndicated basis. Typically banks will require all or a large proportion of the loan exposure to be hedged by interest-rate swaps until its maturity although in these times of low interest rates they may be less strict on this.

There are several things to investigate when preparing a loan-linked ISDA Master Agreement Schedule:

  • Is there a hedging letter?
  • The treatment of Events of Default;
  • The treatment of pre-payments;
  • Is the hedging to share in the security package under the Loan Agreement and, if so, to what extent?
  • The relationship among the ISDA Master Agreement, Loan Agreement and any Intercreditor Deed; and
  • Is the loan to be pre-hedged, simultaneously hedged or post hedged? ...[read more]