of Credit Derivatives
Derivatives: Market Info and awareness
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a credit derivatives contract puts a condition that deliverable obligations must
be Not Contingent. This implies that the payment of interest or principal on
such obligations must not be contingent or discretionary for the issuer – such
as in case of equity shares, but must be fixed. ISDA documentation defines Not
Contingent as “"Not Contingent" means "any obligation (A) the
payment or repayment of principal in respect of which is not in an amount
determined by reference to any formula or index, or which is not subject to any
contingency, and (B) which bears interest at either a fixed or floating rate
that is paid on a periodic basis and computed on a benchmark interest rate plus
or minus a spread, if any".