Overview of the ISDA Credit Support Documentation and Brazilian Collateral Issues Hotel Inter-Continental Sao Paulo, Brazil August 6, 2002 Robert G. Pickel

Overview of the ISDA Credit Support Overview of the ISDA Credit Support Documentation and Brazilian Collateral Issues Documentation and Brazilian Collateral Issues

Hotel Inter-Continental Hotel Inter-Continental Sao Paulo, BrazilSao Paulo, Brazil

August 6, 2002August 6, 2002

Overview of the ISDA Credit Support Overview of the ISDA Credit Support Documentation and Brazilian Collateral Issues Documentation and Brazilian Collateral Issues

Hotel Inter-Continental Hotel Inter-Continental Sao Paulo, BrazilSao Paulo, Brazil

August 6, 2002August 6, 2002

Robert G. PickelExecutive Director and Chief Executive Officer

ISDA

Robert G. PickelExecutive Director and Chief Executive Officer

ISDA

Nycorp:954035Nycorp:954035Nycorp:954035Nycorp:954035

Basics of CollateralizationBasics of CollateralizationBasics of CollateralizationBasics of Collateralization

Risk ReductionRisk Reduction Market and Regulatory ForcesMarket and Regulatory Forces Disadvantages of Other Methods - Guarantees, Disadvantages of Other Methods - Guarantees,

Credit Insurance or Bond, Letter of Credit, Triple-A Credit Insurance or Bond, Letter of Credit, Triple-A SubsSubs

DrawbacksDrawbacks Operational systems and legal supportOperational systems and legal support Costs of collateral and support may be significantCosts of collateral and support may be significant Legal risk : applicable law and procedures may Legal risk : applicable law and procedures may

vary from jurisdiction to jurisdictionvary from jurisdiction to jurisdiction

Risk ReductionRisk Reduction Market and Regulatory ForcesMarket and Regulatory Forces Disadvantages of Other Methods - Guarantees, Disadvantages of Other Methods - Guarantees,

Credit Insurance or Bond, Letter of Credit, Triple-A Credit Insurance or Bond, Letter of Credit, Triple-A SubsSubs

DrawbacksDrawbacks Operational systems and legal supportOperational systems and legal support Costs of collateral and support may be significantCosts of collateral and support may be significant Legal risk : applicable law and procedures may Legal risk : applicable law and procedures may

vary from jurisdiction to jurisdictionvary from jurisdiction to jurisdiction


ISDA Credit Support ISDA Credit Support Documents -- Documents --

A Time of ChangeA Time of Change

ISDA Credit Support ISDA Credit Support Documents -- Documents --

A Time of ChangeA Time of Change Lessons of 1997-1998Lessons of 1997-1998

Reduce time framesReduce time frames Revise dispute resolution processRevise dispute resolution process Broaden the role of ISDA documentsBroaden the role of ISDA documents

Opportunity to make structural changesOpportunity to make structural changes Simplify architectureSimplify architecture Reduce size of documentReduce size of document

Result: 2001 ISDA Margin Provisions and forms of Result: 2001 ISDA Margin Provisions and forms of Amendment to existing credit support documentsAmendment to existing credit support documents

Lessons of 1997-1998Lessons of 1997-1998 Reduce time framesReduce time frames Revise dispute resolution processRevise dispute resolution process Broaden the role of ISDA documentsBroaden the role of ISDA documents

Opportunity to make structural changesOpportunity to make structural changes Simplify architectureSimplify architecture Reduce size of documentReduce size of document

Result: 2001 ISDA Margin Provisions and forms of Result: 2001 ISDA Margin Provisions and forms of Amendment to existing credit support documentsAmendment to existing credit support documents


Background and Structure of Background and Structure of 1994 ISDA Credit Support 1994 ISDA Credit Support

Annex (NY Law)Annex (NY Law)

Background and Structure of Background and Structure of 1994 ISDA Credit Support 1994 ISDA Credit Support

Annex (NY Law)Annex (NY Law) Bilateral, mark-to-market formBilateral, mark-to-market form Cash and securities posted as collateralCash and securities posted as collateral Parties can add other forms of credit supportParties can add other forms of credit support Computation and delivery, substitution and return mechanicsComputation and delivery, substitution and return mechanics Annex also covers:Annex also covers:

Dispute resolutionDispute resolution Holding and using collateral; DistributionsHolding and using collateral; Distributions Events of Default; Rights and RemediesEvents of Default; Rights and Remedies Representations; ExpensesRepresentations; Expenses

Bilateral, mark-to-market formBilateral, mark-to-market form Cash and securities posted as collateralCash and securities posted as collateral Parties can add other forms of credit supportParties can add other forms of credit support Computation and delivery, substitution and return mechanicsComputation and delivery, substitution and return mechanics Annex also covers:Annex also covers:

Dispute resolutionDispute resolution Holding and using collateral; DistributionsHolding and using collateral; Distributions Events of Default; Rights and RemediesEvents of Default; Rights and Remedies Representations; ExpensesRepresentations; Expenses


Background and StructureBackground and StructureBackground and StructureBackground and Structure

Part of Schedule to ISDA MasterPart of Schedule to ISDA Master

Underlying assumption that NY law Underlying assumption that NY law applies; NY law ISDA Masterapplies; NY law ISDA Master

Paragraph 13 of ISDA Credit Support Paragraph 13 of ISDA Credit Support Annex is equivalent of the Schedule to Annex is equivalent of the Schedule to the ISDA Master Agreementthe ISDA Master Agreement

Part of Schedule to ISDA MasterPart of Schedule to ISDA Master

Underlying assumption that NY law Underlying assumption that NY law applies; NY law ISDA Masterapplies; NY law ISDA Master

Paragraph 13 of ISDA Credit Support Paragraph 13 of ISDA Credit Support Annex is equivalent of the Schedule to Annex is equivalent of the Schedule to the ISDA Master Agreementthe ISDA Master Agreement


ISDA Agreement Structure ISDA Agreement Structure 20022002

ISDA Agreement Structure ISDA Agreement Structure 20022002

1992 Master Agreement (Multicurrency-Cross Border)

Governs the legal and credit relationship of the parties

Includes representations, events of default/termination events and covenants

Incorporates Confirmations Schedule used to make changes to

standard provisions

Confirmations (short form)

Incorporate Definitions Specify economic terms of each

transaction Include Transaction-specific

modifications

Credit Support Documents: Offering protection against credit risk

2001 ISDA Margin Supplement (incorporating 2001 ISDA Margin Provisions)

• 1995 Credit Support Annex (Transfer – English Law)

• 1994 Credit Support Annex

(New York Law)

1995 Credit Support Deed (Security Interest – English Law)

1996 Credit Support Annex

(Japanese Law)

Protocols: amending Master Agreement

• 2001 Euro Protocol

• 2000 EMU Protocol (Greece)

• 1998 EMU Protocol

Confirmations (long form) Definitions: for use in documenting Transactions

2000 Definitions (replace the 1991 Definitions (as amended by the 1998 Supplement)

1999 Credit Derivatives Definitions (plus three Supplements published in 2001)

1998 Euro Definitions

1998 FX and Currency Option Definitions (plus revised

Annex A)

1997 Bullion Definitions

1997 Government Bond Option Definitions

1996 Equity Derivatives Definitions

1993 Commodity Derivatives Definitions (as amended by the 2000 Supplement)


Paragraph 1Paragraph 1Paragraph 1Paragraph 1

InterpretationInterpretation

(a)(a) Definitions and InconsistencyDefinitions and Inconsistency

(b)(b) Secured Party and PledgorSecured Party and Pledgor

InterpretationInterpretation

(a)(a) Definitions and InconsistencyDefinitions and Inconsistency

(b)(b) Secured Party and PledgorSecured Party and Pledgor



Security InterestSecurity Interest

Grant by Pledgor of first priority Grant by Pledgor of first priority security interest thereon and right of security interest thereon and right of set-offset-off

Immediate release of security interest Immediate release of security interest and lien upon Transfer of Posted and lien upon Transfer of Posted Collateral to PledgorCollateral to Pledgor

Security InterestSecurity Interest

Grant by Pledgor of first priority Grant by Pledgor of first priority security interest thereon and right of security interest thereon and right of set-offset-off

Immediate release of security interest Immediate release of security interest and lien upon Transfer of Posted and lien upon Transfer of Posted Collateral to PledgorCollateral to Pledgor


Credit Support Obligations Credit Support Obligations Worksheets and ExamplesWorksheets and ExamplesCredit Support Obligations Credit Support Obligations Worksheets and ExamplesWorksheets and Examples

Identify all relevant defined terms (assigned vs. Identify all relevant defined terms (assigned vs. calculated);calculated);

Establish numerical inputs for all “assigned” Establish numerical inputs for all “assigned” defined terms; anddefined terms; and

Do the arithmetic to derive all “calculated” defined Do the arithmetic to derive all “calculated” defined terms.terms.

Identify all relevant defined terms (assigned vs. Identify all relevant defined terms (assigned vs. calculated);calculated);

Establish numerical inputs for all “assigned” Establish numerical inputs for all “assigned” defined terms; anddefined terms; and

Do the arithmetic to derive all “calculated” defined Do the arithmetic to derive all “calculated” defined terms.terms.

The following worksheets and examples demonstrate the mechanics used in Paragraph 3 of the ISDA Credit Support Annex to calculate Credit Support Obligations (including Delivery Amounts and Return Amounts), based on the following three steps:


Delivery Amount Delivery Amount WorksheetWorksheet

Delivery Amount Delivery Amount WorksheetWorksheet

“Assigned” Defined Terms Secured Party Pledgor (Party B)(Party A)

1. Exposure A. [ ] B. n/a

2. Independent Amount A. [ ] B. [ ]

3. Threshold A. n/a B. [ ]

4. Min. Transfer Amount A. n/a B. [ ]

5. Value of Posted Credit A. [ ] B. n/aSupport

“Calculated” Defined Terms Secured Party Pledgor (Party B)(Party A)

6. Credit Support Amount A. n/a B. 1A + 2B - 2A - 3B

7. Delivery Amount A. n/a B. 6B - 5A, iff 7B (4B)


Delivery Amount Delivery Amount WorksheetWorksheetExample 1Example 1



1. Exposure A. 500 B. n/a

2. Independent Amount A. 0 B. 250

3. Threshold A. n/a B. 100

4. Min. Transfer Amount A. n/a B. 50

5. Value of Posted Credit A. 250 B. n/aSupport


6. Credit Support Amount A. n/a B. 500 + 250 - 0 - 100 = 650

7. Delivery Amount A. n/a B. 650 - 250 (iff (50)) = 400





1. Exposure A. 500 B. n/a2. Independent Amount A. 700 B. 3003. Threshold A. n/a B. 2004. Min. Transfer Amount A. n/a B. 505. Value of Posted Credit A. 300 B. n/a

Support“Calculated” Defined Terms Secured Party Pledgor (Party B)

(Party A) 6. Credit Support Amount A. n/a B. 500+300 - 700 - 200

= (100) = 0

7. Delivery Amount A. n/a B. 0


Return Amount WorksheetReturn Amount WorksheetReturn Amount WorksheetReturn Amount Worksheet


1. Exposure A. [ ] B. n/a2. Independent Amount A. [ ] B. [ ]3. Threshold A. n/a B. [ ]4. Min. Transfer Amount A. [ ] B. n/a5. Value of Posted Credit A. [ ] B. n/a


(Party A) 6. Credit Support Amount A. n/a B. 1A + 2B - 2A - 3B7. Return Amount A. 5A - 6B iff B. n/a

7A (4A)


Return Amount WorksheetReturn Amount WorksheetExample 1Example 1



1. Exposure A. 500 B. n/a

2. Independent Amount A. 0 B. 300

3. Threshold A. n/a B. 600

4. Min. Transfer Amount A. 50 B. n/a

5. Value of Posted Credit A. 300 B. n/aSupport


6. Credit Support Amount A. n/a B. 500 + 300 - 0 - 600 = 200

7. Return Amount A. 300 - 200 B. n/a (iff (50))=100





1. Exposure A. 500 B. n/a2. Independent Amount A. 700 B. 3003. Threshold A. n/a B. 2004. Min. Transfer Amount A. 50 B. n/a5. Value of Posted Credit A. 300 B. n/a


(Party A) 6. Credit Support Amount A. n/a B. 500+300 - 700 - 200

= (100)= 0

7. Return Amount A. 300 - 0 (iff B. n/a(50)) = 300



(a)(a) Conditions Precedent - no Event of Default, Conditions Precedent - no Event of Default, Potential Event of Default or Specified Potential Event of Default or Specified Condition/no Early Termination DateCondition/no Early Termination Date

(b)(b) Transfers - next Local Business Day after demandTransfers - next Local Business Day after demand

(c)(c) Calculations - by Valuation Agent as of the Calculations - by Valuation Agent as of the Valuation Time for each Valuation DateValuation Time for each Valuation Date

(d)(d) Substitutions - permitted unless otherwise Substitutions - permitted unless otherwise specifiedspecified

(a)(a) Conditions Precedent - no Event of Default, Conditions Precedent - no Event of Default, Potential Event of Default or Specified Potential Event of Default or Specified Condition/no Early Termination DateCondition/no Early Termination Date

(b)(b) Transfers - next Local Business Day after demandTransfers - next Local Business Day after demand

(c)(c) Calculations - by Valuation Agent as of the Calculations - by Valuation Agent as of the Valuation Time for each Valuation DateValuation Time for each Valuation Date

(d)(d) Substitutions - permitted unless otherwise Substitutions - permitted unless otherwise specifiedspecified

Conditions Precedent, Transfers, Conditions Precedent, Transfers, Calculations and SubstitutionsCalculations and Substitutions

Conditions Precedent, Transfers, Conditions Precedent, Transfers, Calculations and SubstitutionsCalculations and Substitutions



Dispute ResolutionDispute Resolution Notify other party and Valuation AgentNotify other party and Valuation Agent Undisputed amount is transferredUndisputed amount is transferred Parties consultParties consult If dispute relates to Exposure, obtain If dispute relates to Exposure, obtain

Market QuotationsMarket Quotations If dispute relates to Value of Credit If dispute relates to Value of Credit

Support, resolve in manner stipulated in Support, resolve in manner stipulated in Paragraph 13Paragraph 13

Dispute ResolutionDispute Resolution Notify other party and Valuation AgentNotify other party and Valuation Agent Undisputed amount is transferredUndisputed amount is transferred Parties consultParties consult If dispute relates to Exposure, obtain If dispute relates to Exposure, obtain

Market QuotationsMarket Quotations If dispute relates to Value of Credit If dispute relates to Value of Credit

Support, resolve in manner stipulated in Support, resolve in manner stipulated in Paragraph 13Paragraph 13



Holding and Using Posted Holding and Using Posted CollateralCollateral

Holding and Using Posted Holding and Using Posted CollateralCollateral

(a)(a) Care of Posted CollateralCare of Posted Collateral

(b)(b) Eligibility to Hold Posted Collateral; CustodiansEligibility to Hold Posted Collateral; Custodians

(c)(c) Use of Posted Collateral - Broadly PermittedUse of Posted Collateral - Broadly Permitted

(d)(d) Distributions and Interest AmountDistributions and Interest Amount

(a)(a) Care of Posted CollateralCare of Posted Collateral

(b)(b) Eligibility to Hold Posted Collateral; CustodiansEligibility to Hold Posted Collateral; Custodians

(c)(c) Use of Posted Collateral - Broadly PermittedUse of Posted Collateral - Broadly Permitted

(d)(d) Distributions and Interest AmountDistributions and Interest Amount



Failure to post/return collateral or to pay Failure to post/return collateral or to pay distributions or interest when due for 2 Local distributions or interest when due for 2 Local Business Days after noticeBusiness Days after notice

Failure to comply with provisions regarding Failure to comply with provisions regarding use of collateral for 5 Local Business Days use of collateral for 5 Local Business Days after noticeafter notice

Failure to perform any other agreement or Failure to perform any other agreement or obligation under Annex for 30 days after obligation under Annex for 30 days after noticenotice

Failure to post/return collateral or to pay Failure to post/return collateral or to pay distributions or interest when due for 2 Local distributions or interest when due for 2 Local Business Days after noticeBusiness Days after notice

Failure to comply with provisions regarding Failure to comply with provisions regarding use of collateral for 5 Local Business Days use of collateral for 5 Local Business Days after noticeafter notice

Failure to perform any other agreement or Failure to perform any other agreement or obligation under Annex for 30 days after obligation under Annex for 30 days after noticenotice

Events of DefaultEvents of Default


Paragraph 8(a)Paragraph 8(a)Paragraph 8(a)Paragraph 8(a)Secured Party’s Rights and Secured Party’s Rights and

RemediesRemedies Triggered by:Triggered by:

(1)(1) Occurrence of Event of Default or Specified Occurrence of Event of Default or Specified Condition with respect to Pledgor; orCondition with respect to Pledgor; or

(2)(2) Occurrence/Designation of Early Termination DateOccurrence/Designation of Early Termination Date

Exercise of Rights and RemediesExercise of Rights and Remedies

(i)(i) rights available under applicable law (NY UCC)rights available under applicable law (NY UCC)

(ii)(ii) rights under terms of Other Posted Supportrights under terms of Other Posted Support

(iii)(iii) right to set offright to set off

(iv)(iv) right to liquidate Posted Collateralright to liquidate Posted Collateral

Secured Party’s Rights and Secured Party’s Rights and RemediesRemedies

Triggered by:Triggered by:

(1)(1) Occurrence of Event of Default or Specified Occurrence of Event of Default or Specified Condition with respect to Pledgor; orCondition with respect to Pledgor; or

(2)(2) Occurrence/Designation of Early Termination DateOccurrence/Designation of Early Termination Date


(i)(i) rights available under applicable law (NY UCC)rights available under applicable law (NY UCC)


(iii)(iii) right to set offright to set off

(iv)(iv) right to liquidate Posted Collateralright to liquidate Posted Collateral


Paragraph 8(b)Paragraph 8(b)Paragraph 8(b)Paragraph 8(b)Pledgor’s Rights and RemediesPledgor’s Rights and Remedies

Triggered by Occurrence/Designation of Early Termination Date as Triggered by Occurrence/Designation of Early Termination Date as a result of an Event of Default or Specified Condition with respect a result of an Event of Default or Specified Condition with respect to Secured Partyto Secured Party


(i)(i) rights available under applicable lawrights available under applicable law


(iii)(iii) Secured Party obligated to Transfer all Posted Secured Party obligated to Transfer all Posted Collateral and the Interest AmountCollateral and the Interest Amount

(iv)(iv) right to set off or withhold payment of remaining right to set off or withhold payment of remaining amountsamounts

Pledgor’s Rights and RemediesPledgor’s Rights and Remedies Triggered by Occurrence/Designation of Early Termination Date as Triggered by Occurrence/Designation of Early Termination Date as

a result of an Event of Default or Specified Condition with respect a result of an Event of Default or Specified Condition with respect to Secured Partyto Secured Party


(i)(i) rights available under applicable lawrights available under applicable law


(iii)(iii) Secured Party obligated to Transfer all Posted Secured Party obligated to Transfer all Posted Collateral and the Interest AmountCollateral and the Interest Amount

(iv)(iv) right to set off or withhold payment of remaining right to set off or withhold payment of remaining amountsamounts


Paragraphs 8(c)/(d) Paragraphs 8(c)/(d) Paragraphs 8(c)/(d) Paragraphs 8(c)/(d)

Rights and RemediesRights and Remedies

Deficiencies and Excess ProceedsDeficiencies and Excess Proceeds Final ReturnsFinal Returns

Rights and RemediesRights and Remedies

Deficiencies and Excess ProceedsDeficiencies and Excess Proceeds Final ReturnsFinal Returns



RepresentationsRepresentations Power to grant a security interestPower to grant a security interest Sole owner of or right to transfer Eligible CollateralSole owner of or right to transfer Eligible Collateral Creation of a valid and perfected first priority Creation of a valid and perfected first priority

security interestsecurity interest No other security interest on any Posted CollateralNo other security interest on any Posted Collateral Special Representation for U.S. bank or thrift - Special Representation for U.S. bank or thrift -

Appendix F to User’s GuideAppendix F to User’s Guide

RepresentationsRepresentations Power to grant a security interestPower to grant a security interest Sole owner of or right to transfer Eligible CollateralSole owner of or right to transfer Eligible Collateral Creation of a valid and perfected first priority Creation of a valid and perfected first priority

security interestsecurity interest No other security interest on any Posted CollateralNo other security interest on any Posted Collateral Special Representation for U.S. bank or thrift - Special Representation for U.S. bank or thrift -

Appendix F to User’s GuideAppendix F to User’s Guide



ExpensesExpenses Each party pays its own when performing its Each party pays its own when performing its

contractual obligationscontractual obligations Because the Pledgor remains the “owner” of Because the Pledgor remains the “owner” of

collateral, continues to be liable to pay taxes and collateral, continues to be liable to pay taxes and other charges that may be levied on collateralother charges that may be levied on collateral

Costs incurred by Secured Party in liquidating and Costs incurred by Secured Party in liquidating and applying collateral are payable by the Defaulting applying collateral are payable by the Defaulting Party or (if no Defaulting Party) equally by both Party or (if no Defaulting Party) equally by both partiesparties

ExpensesExpenses Each party pays its own when performing its Each party pays its own when performing its

contractual obligationscontractual obligations Because the Pledgor remains the “owner” of Because the Pledgor remains the “owner” of

collateral, continues to be liable to pay taxes and collateral, continues to be liable to pay taxes and other charges that may be levied on collateralother charges that may be levied on collateral

Costs incurred by Secured Party in liquidating and Costs incurred by Secured Party in liquidating and applying collateral are payable by the Defaulting applying collateral are payable by the Defaulting Party or (if no Defaulting Party) equally by both Party or (if no Defaulting Party) equally by both partiesparties



Other ProvisionsOther Provisions(a)(a) Default Interest - applicable when Default Interest - applicable when Secured PartySecured Party

fails to make a timely transferfails to make a timely transfer

(b)(b) Further AssurancesFurther Assurances

(c)(c) Further Protections - Pledgor must safeguard all Further Protections - Pledgor must safeguard all Posted Credit SupportPosted Credit Support

(d)(d) Good Faith and Commercially Reasonable MannerGood Faith and Commercially Reasonable Manner

(e)(e) Demands and NoticesDemands and Notices

(f)(f) Specification of Certain Matters in ConfirmationsSpecification of Certain Matters in Confirmations

Other ProvisionsOther Provisions(a)(a) Default Interest - applicable when Default Interest - applicable when Secured PartySecured Party

fails to make a timely transferfails to make a timely transfer

(b)(b) Further AssurancesFurther Assurances

(c)(c) Further Protections - Pledgor must safeguard all Further Protections - Pledgor must safeguard all Posted Credit SupportPosted Credit Support

(d)(d) Good Faith and Commercially Reasonable MannerGood Faith and Commercially Reasonable Manner

(e)(e) Demands and NoticesDemands and Notices

(f)(f) Specification of Certain Matters in ConfirmationsSpecification of Certain Matters in Confirmations



Elections and VariablesElections and Variables Eligible Collateral/Valuation PercentagesEligible Collateral/Valuation Percentages ThresholdsThresholds Valuation and TimingValuation and Timing ““Specified Conditions”Specified Conditions” Dispute Resolution provisions where Value of Posted Dispute Resolution provisions where Value of Posted

Credit Support not agreedCredit Support not agreed Eligibility to hold Posted Collateral; CustodiansEligibility to hold Posted Collateral; Custodians

Elections and VariablesElections and Variables Eligible Collateral/Valuation PercentagesEligible Collateral/Valuation Percentages ThresholdsThresholds Valuation and TimingValuation and Timing ““Specified Conditions”Specified Conditions” Dispute Resolution provisions where Value of Posted Dispute Resolution provisions where Value of Posted

Credit Support not agreedCredit Support not agreed Eligibility to hold Posted Collateral; CustodiansEligibility to hold Posted Collateral; Custodians



Distributions and Interest Amount Distributions and Interest Amount Additional RepresentationsAdditional Representations Other Eligible Support and Other Other Eligible Support and Other

Posted SupportPosted Support Demands and NoticesDemands and Notices Other ProvisionsOther Provisions

Distributions and Interest Amount Distributions and Interest Amount Additional RepresentationsAdditional Representations Other Eligible Support and Other Other Eligible Support and Other

Posted SupportPosted Support Demands and NoticesDemands and Notices Other ProvisionsOther Provisions


2001 ISDA Margin 2001 ISDA Margin ProvisionsProvisions

2001 ISDA Margin 2001 ISDA Margin ProvisionsProvisions

The New StructureThe New Structure Common operational provisions – Part 1Common operational provisions – Part 1 New York Law: pledge/security interest New York Law: pledge/security interest

approach – Part 2approach – Part 2 English Law: title transfer approach – Part 3English Law: title transfer approach – Part 3 Other jurisdictions – Part 4Other jurisdictions – Part 4 Definitions – Part 5Definitions – Part 5 Supplement and other Appendices (Forms of Supplement and other Appendices (Forms of

Notices)Notices)

The New StructureThe New Structure Common operational provisions – Part 1Common operational provisions – Part 1 New York Law: pledge/security interest New York Law: pledge/security interest

approach – Part 2approach – Part 2 English Law: title transfer approach – Part 3English Law: title transfer approach – Part 3 Other jurisdictions – Part 4Other jurisdictions – Part 4 Definitions – Part 5Definitions – Part 5 Supplement and other Appendices (Forms of Supplement and other Appendices (Forms of

Notices)Notices)


Issues to ConsiderIssues to ConsiderIssues to ConsiderIssues to Consider

Nature and location of collateralNature and location of collateral Nature and location of counterpartyNature and location of counterparty Perfection issuesPerfection issues Tax issuesTax issues Recharacterization issuesRecharacterization issues Collateral Opinion ProjectsCollateral Opinion Projects

Nature and location of collateralNature and location of collateral Nature and location of counterpartyNature and location of counterparty Perfection issuesPerfection issues Tax issuesTax issues Recharacterization issuesRecharacterization issues Collateral Opinion ProjectsCollateral Opinion Projects


ISDA Collateral Opinion ISDA Collateral Opinion ProjectsProjects

ISDA Collateral Opinion ISDA Collateral Opinion ProjectsProjects

ISDA is in the process of obtaining legal opinions relating to ISDA is in the process of obtaining legal opinions relating to creation and perfection of security interests under the New creation and perfection of security interests under the New York and English law collateral documents.York and English law collateral documents.

Opinions received from:Opinions received from:AustraliaAustralia EnglandEngland ItalyItaly SingaporeSingapore

AustriaAustria FinlandFinland JapanJapan South KoreaSouth KoreaBelgium Belgium FranceFrance LuxembourgLuxembourg SwedenSwedenBermudaBermuda GermanyGermany MalaysiaMalaysia SwitzerlandSwitzerlandCanadaCanada Hong KongHong Kong The NetherlandsThe Netherlands TaiwanTaiwanCayman IslandsCayman Islands IndonesiaIndonesia New ZealandNew ZealandThailandThailandDenmarkDenmark IrelandIreland PortugalPortugal U.S.A.U.S.A.

Awaiting final opinions from:Awaiting final opinions from:NorwayNorway South AfricaSouth Africa

Opinions commissioned for:Opinions commissioned for:British Virgin IslandsBritish Virgin Islands ScotlandScotland

ISDA is in the process of obtaining legal opinions relating to ISDA is in the process of obtaining legal opinions relating to creation and perfection of security interests under the New creation and perfection of security interests under the New York and English law collateral documents.York and English law collateral documents.

Opinions received from:Opinions received from:AustraliaAustralia EnglandEngland ItalyItaly SingaporeSingapore

AustriaAustria FinlandFinland JapanJapan South KoreaSouth KoreaBelgium Belgium FranceFrance LuxembourgLuxembourg SwedenSwedenBermudaBermuda GermanyGermany MalaysiaMalaysia SwitzerlandSwitzerlandCanadaCanada Hong KongHong Kong The NetherlandsThe Netherlands TaiwanTaiwanCayman IslandsCayman Islands IndonesiaIndonesia New ZealandNew ZealandThailandThailandDenmarkDenmark IrelandIreland PortugalPortugal U.S.A.U.S.A.

Awaiting final opinions from:Awaiting final opinions from:NorwayNorway South AfricaSouth Africa

Opinions commissioned for:Opinions commissioned for:British Virgin IslandsBritish Virgin Islands ScotlandScotland