Bank One Corporation - Page 206

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          credit event.  The 1992 ISDA form agreement also provided that              
          the parties to a swap governed by that agreement could specify              
          any other event as a termination event in the schedule or                   
          confirmation.22                                                             
               The ISDA form agreements generally prohibited each party               
          thereto from selling or transferring its swap position to a third           
          party without the consent of the counterparty.  The swap                    
          contract, however, could be transferred to another in the case of           
          an amalgamation, consolidation, merger, or transfer of assets.  A           
          nondefaulting party also could transfer any payment owed to it by           
          a defaulting party.  The ISDA form agreements also permitted one            
          counterparty to transfer its swap agreement to one of its                   
          branches or to an affiliate in order to avoid a termination                 
          event.  In that case, the other counterparty could not withhold             
          its consent to the transfer if its existing policies would permit           
          it to enter into transactions with the transferee on the terms              
          proposed.                                                                   
               The ISDA form agreements provided that where there was an              
          early termination due to the default of one party, the payment              
          would be ascertained by reference to quotations from leading                


          22 Notwithstanding the terms of a particular swap, a party                  
          thereto could synthetically terminate any swap by entering into             
          an offsetting or mirror swap; i.e., a new swap with terms                   
          identical to those in the remainder of an existing swap, but with           
          the payments reversed.  The parties also could mutually agree to            
          terminate a swap with one party paying the other in a buyout.               




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Last modified: May 25, 2011