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Credit Default Swap Agreement Template for United States

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Key Requirements PROMPT example:

Credit Default Swap Agreement

"I need a Credit Default Swap Agreement under U.S. law between an investment bank (as protection seller) and a pension fund (as protection buyer), with mandatory clearing provisions and special entity protections, to be effective from March 1, 2025."

Document background
The Credit Default Swap Agreement is essential for parties seeking to manage credit risk exposure in financial transactions under U.S. jurisdiction. This document is used when one party (the protection buyer) wishes to transfer the credit risk of a reference entity to another party (the protection seller) in exchange for regular premium payments. The agreement must comply with comprehensive U.S. regulatory requirements, including the Dodd-Frank Act, CFTC regulations, and applicable SEC rules. It typically follows ISDA standard documentation while incorporating jurisdiction-specific provisions for U.S. law compliance, reporting obligations, and clearing requirements. The document is crucial for financial institutions, investment firms, and corporations engaging in credit risk management strategies.
Suggested Sections

1. Parties: Identification of the contracting parties, including registration status and regulatory classifications

2. Background: Context of the agreement and relationship between the parties

3. Definitions: Key terms used in the agreement, incorporating ISDA definitions by reference

4. Transaction Terms: Core economic terms including reference entity, obligations, credit events, and settlement methods

5. Payment Obligations: Premium payments, calculation methods, and payment dates

6. Credit Events: Detailed specifications of triggering events and determination process

7. Settlement: Physical or cash settlement procedures, valuation methods, and delivery requirements

8. Representations and Warranties: Standard and regulatory-required representations from both parties

9. Covenants: Ongoing obligations including reporting, clearing, and regulatory compliance

10. Events of Default: Circumstances constituting default and corresponding remedies

11. Term and Termination: Duration, early termination rights, and close-out procedures

12. Governing Law and Jurisdiction: Choice of law and dispute resolution provisions

Optional Sections

1. Clearing Requirements: Required if the CDS is subject to mandatory clearing under Dodd-Frank

2. Special Entity Provisions: Required when dealing with government entities or pension plans

3. Additional Tax Provisions: Required for cross-border transactions or special tax situations

4. Break Clauses: Optional provisions allowing periodic termination rights

5. Credit Support Requirements: Optional collateral and margin provisions if not covered by separate CSA

6. Third-Party Rights: Required if certain terms are enforceable by non-parties

7. Agent Provisions: Required when either party acts through an agent

Suggested Schedules

1. Transaction Confirmation: Detailed economic terms of the specific CDS transaction

2. Reference Entity Description: Detailed information about the reference entity and reference obligations

3. Credit Support Annex: Collateral and margin requirements if not covered by existing CSA

4. Calculation Agent Provisions: Detailed procedures for calculations and determinations

5. Standard Settlement Terms: ISDA standard terms for settlement procedures

6. Form of Notices: Templates for credit event notices, physical settlement notices, etc.

7. Eligible Transferee Provisions: Requirements for permitted assignments and transfers

8. Regulatory Reporting Requirements: Specific reporting obligations and procedures

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions



















































Clauses




































Relevant Industries

Financial Services

Banking

Insurance

Investment Management

Securities and Capital Markets

Risk Management

Treasury Services

Asset Management

Hedge Funds

Pension Fund Management

Corporate Finance

Derivatives Trading

Relevant Teams

Legal

Compliance

Risk Management

Trading

Operations

Treasury

Credit Analysis

Documentation

Regulatory Reporting

Finance

Investment

Structured Products

Portfolio Management

Relevant Roles

Credit Derivatives Trader

Risk Manager

Compliance Officer

Legal Counsel

Derivatives Documentation Specialist

Credit Risk Analyst

Portfolio Manager

Trading Operations Manager

Chief Investment Officer

Treasury Manager

Regulatory Reporting Officer

Structured Products Specialist

Credit Portfolio Manager

Financial Controller

Chief Financial Officer

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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