The International Swaps and Derivatives Association (“ISDA”) announced the publication of the 2014 Credit Derivatives Definitions (the “2014 Definitions”), which pertain to credit default swaps (“CDS”).  The 2014 Definitions are intended ultimately to supersede the 2003 ISDA Credit Derivatives Definitions.  Although ISDA has stated that it expects market participants to begin confirming transactions using the 2014 Definitions on the September 2014 CDS roll date, use of the 2014 Definitions is not automatic.  The 2014 Definitions only apply if parties to a swap elect to use them either when documenting a new swap or when amending a pre-existing swap.

The 2014 Definitions reflect recent events.  For example, they add a new credit event triggered by a government-initiated bail-in, as well as related provisions such as those governing the delivery of the proceeds of bailed-in debt.  The 2014 Definitions also add additional provisions pertaining to CDS contracts on sovereign reference entities.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.