ISDA Master Agreement
The ISDA master agreement is a contract template created by the International Swaps and Derivatives Association (ISDA) to enable OTC derivatives to be traded easily within a framework agreed to by both parties. Once the agreement is signed the parties are able to complete all future transactions under its terms.
The same master agreement is always used, but the parties may use the attached schedule to introduce elections and modify standard provisions to fit their needs. The document also includes confirmations, which specify the terms of each transaction and list definitions of standard terms for documenting particular types of transactions.
In addition to the schedule and confirmations, an ISDA master agreement often includes a credit support annex which governs the terms under which collateral is posted or transferred between the swap counterparties. This helps to minimize the credit risk associated with swap transactions.
Shipkevich’s ISDA Master Agreement services include:
- Performing due diligence to determine optimal credit terms for client;
- Advising the client on negotiating agreement terms;
- Drafting master agreement and all supporting documents, including schedules, credit support annexes and other relevant documentation;
- Include ongoing credit review provisions making margin terms contingent on the counterparty’s financial condition in order to minimize credit risk;
- Reviewing existing agreements to ensure that they fit the client’s needs;
- Providing regulatory support for the compliance of agreement provisions with all applicable regulations.