Publication Of 2014 ISDA Credit Derivatives Definitions

On February 21, the International Swaps and Derivatives Association, Inc. ("ISDA") announced the publication of the 2014 ISDA Credit Derivatives Definitions (the "2014 CD Definitions"), which amend several terms that existed in the 2003 version of the definitions, and introduce several new terms based on "lessons learned."

The most important new terms in the 2014 CD Definitions are in response to events affecting financial institutions and sovereign entities that have occurred since the introduction of the 2003 version of definitions, including governmental interventions in bank debt.  These new terms include an entirely new credit event known as "Governmental Intervention,"¹ which is intended to be triggered upon a government-initiated "bail-in"² or debt restructuring, as well as a provision for delivery of instruments resulting from a government-initiated debt exchange.