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Credit Support Agreement
"I need a Credit Support Agreement under Canadian law for a bilateral arrangement between our investment fund and a major Canadian bank, with specific provisions for both cash and securities collateral, to be effective from March 1, 2025."
1. Parties: Identification of the credit support provider(s) and recipient(s)
2. Background: Context of the agreement, reference to related agreements, and purpose of the credit support arrangement
3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and references to industry standard definitions
4. Credit Support Obligations: Core obligations regarding posting of collateral, including delivery amount calculations and transfer timing
5. Conditions Precedent: Conditions that must be satisfied before the agreement becomes effective
6. Creation and Perfection of Security Interest: Provisions establishing the security interest and steps for perfection
7. Representations and Warranties: Standard and specific representations by each party
8. Valuation and Calculations: Methods for valuing collateral and calculating exposure
9. Substitution and Return of Collateral: Rules and procedures for substituting and returning posted collateral
10. Income and Interest on Collateral: Treatment of income earned on posted collateral
11. Events of Default: Circumstances constituting default and consequences
12. Rights and Remedies: Enforcement rights and remedies upon default
13. Dispute Resolution: Procedures for resolving disputes regarding calculations or valuations
14. Notices: Requirements for giving effective notice under the agreement
15. Governing Law and Jurisdiction: Choice of law and jurisdiction provisions
16. General Provisions: Standard boilerplate provisions including amendments, assignments, and severability
1. Additional Credit Support Provider Provisions: Used when there are third-party credit support providers or guarantors
2. Cross-Border Provisions: Required when the agreement involves parties from different jurisdictions
3. Eligible Collateral Schedule Amendments: Used when parties want to modify the types of eligible collateral
4. Tax Provisions: Detailed tax provisions needed for cross-border arrangements or specific tax situations
5. Regulatory Compliance: Special provisions required for regulated entities or to comply with specific regulatory regimes
6. Independent Amount Provisions: Used when additional collateral beyond exposure calculations is required
7. Minimum Transfer Amount Provisions: Optional provisions to set thresholds for collateral transfers
8. Custody Arrangements: Required when using third-party custodians for collateral
9. Set-off Rights: Additional set-off provisions beyond standard rights
1. Eligible Collateral Schedule: Lists approved types of collateral and applicable haircuts
2. Valuation Percentages: Detailed schedule of valuation percentages for different types of collateral
3. Notice Details: Contact information and notice details for all parties
4. Form of Transfer/Release Notice: Standard forms for requesting collateral transfers or releases
5. Custody Agreement: If applicable, agreement with third-party custodian
6. Jurisdictional Requirements: Specific requirements for different jurisdictions involved
7. Form of Eligibility Notice: Standard form for confirming eligibility of new collateral types
8. Calculation Examples: Examples of exposure and collateral requirement calculations
Authors
Banking
Financial Services
Investment Management
Insurance
Energy Trading
Commodities Trading
Asset Management
Capital Markets
Corporate Treasury
Private Equity
Hedge Funds
Infrastructure
Real Estate
Manufacturing
Technology
Legal
Treasury
Risk Management
Compliance
Trading Operations
Credit Risk
Collateral Management
Financial Control
Regulatory Affairs
Documentation
Securities Operations
Transaction Management
Chief Financial Officer
Treasury Manager
Risk Manager
Collateral Manager
Legal Counsel
Compliance Officer
Credit Risk Officer
Trading Operations Manager
Financial Controller
Securities Operations Manager
Credit Analyst
Portfolio Manager
Corporate Treasurer
Legal Operations Manager
Regulatory Compliance Manager
Transaction Manager
Documentation Specialist
Credit Risk Analyst
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