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credit support annex - additional provisions

We have put together a collection of additional provisions for use in the credit support annex. The collection is viewed by you subject to the terms and conditions for use.

Final Returns

When no amounts are or may become payable by the Transferor with respect to any obligations under this Agreement (except for any potential liability under Section 2(d) of this Agreement), the Transferee will transfer to the Transferor Equivalent Credit Support with respect to the Credit Support Balance.

Ineligible Credit Support

If at any time any Eligible Credit Support which has been transferred pursuant to Paragraph 2(a) ceases to qualify as Eligible Credit Support ("Ineligible Credit Support"), the Transferee shall, upon demand by the Transferor, transfer to the Transferor securities equivalent to any Ineligible Credit Support forming part of the Transferor's Credit Support Balance. The Transferee's obligation to transfer such securities is subject to the condition precedent that there is then no Delivery Amount applicable to the Transferor.

interest rate

The “Interest Rate” in relation to each Eligible Currency above will be the market rate commercially obtainable by the Transferee or such other rate determined by the Transferee.

Substitution of Securities in relation to Coupon Payment.

In relation to any item of Eligible Credit Support in the form of securities [other than Japanese securities] which is held by a Transferee as transferred from the Transferor under this Annex, and in relation to which a coupon payment date is scheduled to occur, both parties agree that they shall perform an exchange which shall be completed not later than the second Local Business Day preceding such coupon payment date, in accordance with the provisions of Paragraph 3(c)(ii) (except that no consent from the Transferee shall be necessary for the purpose of such exchange).

sample modifications

paragraph 5(c)

"(c) Rights of Transferee to Japanese Posted Credit Support. Until the Transferee is required, pursuant to the terms of this Annex, to return the Japanese Posted Credit Support, the Transferee shall be entitled to have all the incidents of ownership of the Japanese Posted Credit Support, including, without limitation, the right to sell, transfer, lend or otherwise dispose of, and register or record in the name of the Transferee, its Custodian or nominee, the Japanese Posted Credit Support.

For purposes of the obligation to transfer Japanese Credit Support or Japanese Posted Credit Support or Equivalent Japanese Credit Support pursuant to Paragraphs 2 and 3 and any rights or remedies authorised under this Agreement, the Transferee will be deemed to continue to hold all Japanese Posted Credit Support and, unless the Transferor receives Distributions made thereon with the consent of the Transferee, will be deemed to receive such distributions, regardless of whether the Transferee has exercised any rights with respect to any Japanese Posted Credit Support pursuant to this Paragraph 5(c)."

paragraph 6(b)

(b) Transferee's Rights and Remedies in Relation to Japanese Posted Credit Support.
If an Early Termination Date is designated or deemed to occur as a result of an Event of Default in relation to the Transferor, then, unless the Transferor has paid in full all of its Obligations that are then due, the Transferee may exercise one or more of the following rights and remedies:
(i) all rights and remedies available under applicable law with respect to Japanese Posted Credit Support held by the Transferee; and

(ii) the right to (1) Set-off any amounts payable by the Transferor with respect to any Obligations against Japanese Posted Credit Support

without prior notice or formalities which might otherwise be required, in such order as the Transferee may elect, to the extent permitted under applicable law; provided that where such Japanese Posted Credit Support consists of Japanese Posted Credit Support in the form of securities, the Transferee is deemed to opt to repay the Japanese Yen cash equivalent pursuant to Paragraph 2(c) for this purpose, and provided further that where automatic early termination is applicable to such termination, and all outstanding Transactions will be terminated without action by the parties, Set-off of all amounts payable by the Transferor with respect to all of the Obligations against all of the Japanese Posted Credit Support shall be deemed to have been effected automatically upon such termination, and (2) if necessary in connection with such right to Set-off, convert such Japanese Posted Credit Support into another currency at the time of effecting such Set-off.

Each party acknowledges and agrees that Japanese Posted Credit Support in the form of securities may decline speedily in value and is of a type customarily sold on a recognised market, and, accordingly, the Transferor is not entitled to prior notice of any sale of that Japanese Posted Credit Support by the Transferee, except any notice that is required under applicable law and cannot be waived.


The above notes are intended to provide only general outlines and should be read in conjunction with, and are qualified in their entirety by, the full provisions of the relevant ISDA provisions and definitions. They should never be used in place of professional advice. We accept no responsibility for any loss arising from any action taken or not taken by anyone using this material or using this material in conjunction with any ISDA documentation in reliance thereof.

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