Contingent Forward Contract In Phoenix
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FAQ
The "Phoenix" or "Lookback" clause is common in DCHs, covering scenarios where Completion fails, possibly due to an unexpected negative outcome at a Shareholders' Meeting. Here, the DCH would end, and the bank would bear the mark-to-market losses of its hedge, if there are any.
The framework consists of a master agreement, a schedule, confirmations, definition booklets, and credit support documentation.
The "Phoenix" or "Lookback" clause is common in DCHs, covering scenarios where Completion fails, possibly due to an unexpected negative outcome at a Shareholders' Meeting. Here, the DCH would end, and the bank would bear the mark-to-market losses of its hedge, if there are any.
The break is applied from the Trade Date and covers both the option and underlying swap up to the underlying swap Termination Date. A break clause / revised break clause would be applied from the Expiration Date as if such date was the Trade Date for the purposes of the ISDA ETOP Best Practice statement.
– Phoenix clause: The phoenix or “lookback” clause is viewed as a protection which mitigates the bank's risk exposure under any back- to-back trade entered into in connection with a DC.
A deal contingent forward is a specialised forward foreign exchange (FX) contract. The hedging customer is only obliged to fulfil the contract if a planned major transaction, such as an acquisition, occurs.
If one or more of the named executives dies, quits, spends too much time on another job, or is otherwise unavailable, the key man clause puts investing on hold. The firm cannot make new investments until a suitable replacement is found.
