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Negotiating Skills for the ISDA Master Agreement: The Essential Playbook for Over-the-Counter Derivatives (paperback)

By Seth Phillip Bender

Published by FT Press

Published Date: Feb 1, 2011


In the wake of recent turbulence in the financial markets, institutions that transact OTC derivatives are increasingly relying on the International Swaps and Derivatives Association, Inc.’s (“ISDA”) Master Agreement. However, because this agreement is extremely complex, many money managers, hedge fund managers, and traders find themselves at a serious disadvantage when negotiating with dealer counterparties. Now, for the first time, there’s a complete, practical guide to successfully negotiating the ISDA Master Agreement and its associated Credit Support Annexes. Negotiating Skills for the ISDA Master Agreement helps readers clearly understand what dealers will and won’t concede, helping them focus on the issues and provisions they can actually change. Long-time OTC derivatives consultant Seth Phillip Bender clearly introduces the ISDA Master Agreement’s documentation architecture, provides drafting recommendations and language suggestions, and offers specific operational tips related to the Credit Support Annex and the collaterization of exposure. He also devotes a full chapter to recent ISDA initiatives, showing how they have affected negotiations, and guiding readers in aligning with them. Simply put, this book gives financial professionals the insights they need to protect their interests in today’s OTC derivatives marketplace--fairly, efficiently, and consistently.

Table of Contents

Foreword by Christian Pugaczewski, Esq.     xi

Structure of This Playbook     1

Important Note on Playbook Structure     5

Chapter 1: Framework of the ISDA Master Agreement     7

Chapter 2: Negotiating the Schedule to the ISDA Master Agreement     17

Chapter 3: Introduction to the Credit Support Annex     97

Chapter 4: Negotiating the Paragraph 13 to the 1994 ISDA Credit Support Annex     105

Chapter 5: New ISDA Initiatives     133

Appendix A: Sample Schedule to the 1992 ISDA Master Agreement     145

Appendix B: Sample Paragraph 13 to the 1994 ISDA Credit Support Annex     159

Appendix C: Summary of Suggested Provisions     165

Appendix D: Selected Terms     177

Appendix E: Preprinted 1992 ISDA Master Agreement     181

Appendix F: Preprinted 2002 ISDA Master Agreement     207

Appendix G: Preprinted 1994  ISDA Credit Support Annex     245

Index     261