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ISDA Negotiation

Perhaps the most commonly overlooked aspect of the hedging process is the ISDA negotiation.

Master Agreement

Published by the International Swaps and Derivatives Association (“ISDA”), the ISDA Master Agreement covers payment obligations, representations, covenants, events of default, early terminations, transfers, governing law and other contractual terms.

Schedule to the Master Agreement

The Schedule to the ISDA contains credit provisions specific to a particular financing.


The Confirmation is the formal document sent after execution and memorializes the transaction. Once signed, it becomes a part of the ISDA Master and supersedes any other documents.

Other Documents

Banks will typically require a Board Resolution, formation documents, and a legal opinion depending on the transaction.

Banks frequently suggest these documents are industry standard or boilerplate, when in fact they are highly negotiable.

Even the best real estate attorneys are typically unfamiliar with the critical points to be negotiated in the ISDA.  Pensford’s ISDA attorneys will work directly with your attorney to obtain the most favorable terms possible.

Common Documentation Considerations
  • Cross Default and Thresholds
  • Definition of Affiliates, Specified Entity, and Specified Transaction
  • Additional Termination Events (ATE’s), Fail to be Secured language, Death of Guarantor, etc
  • Definition of Credit Support Documents
  • Governing law
  • Covenants of Financial Agreements
  • Transfer
  • Independent Obligations