Hedge counterparty meaning

What does this Practice Note cover? Inflation derivatives serve as a key risk management tool, enabling participants to hedge effectively against fluctuations in inflation rates. The market is sizeable, well established and dates back to its earliest forms in the early 1980s. In 2014, the International Swaps and Derivatives Association (ISDA) estimated the global non‑cleared inflation derivatives market at around US$3tn. In recent years, pronounced volatility and rising inflation across several major regions, including the UK, have drawn renewed attention to these instruments. This Practice Note summarises: what inflation derivatives are who uses inflation derivatives documentation product types, and future developments What are inflation derivatives? An inflation derivative is a financial contract used to pass the risk, or the potential benefits, of movements in inflation from one counterparty to another. These instruments trade both over‑the‑counter (OTC) and on exchanges; this Practice Note focuses on the OTC market. Inflation‑linked payments under an inflation derivative are calculated by reference to...

This glossary sets out many of the expressions commonly used in the leveraged finance market. Words appearing in the definitions in bold are defined elsewhere in this glossary. For further banking terminology, please refer to the main Banking & Finance Glossary... Acquisition finance glossary—A Acceleration Acceleration is the formal action taken by the agent, on the instructions of the majority lenders, following an event of default, such as making a demand for early repayment of the loan. See Practice Note: Accelerating a loan for more information... Accordion feature/accordion facility An accordion, also called an incremental debt feature, is a mechanism in the facilities agreement that, provided specified conditions are satisfied (for example, pro forma compliance with a leverage test), permits those lenders under the facilities agreement who wish to do so to advance additional debt. The terms for that extra debt are typically captured in an increase notice. This accordion or incremental debt flexibility is different from structural adjustment, which usually requires the majority consent...

This glossary sets out numerous expressions regularly encountered in the restructuring & insolvency sphere. Words shown in bold within definitions are themselves explained in other entries in this glossary as well. A Article X The MLIJ contains a single provision named Article X, aimed at jurisdictions that have already implemented the MLCBI, like England, or are weighing its adoption. Article X states: ‘Not withstanding any prior interpretation to the contrary, the relief available under [insert a cross-reference to the legislation of this State enacting Article 21 of the UNCITRAL Model Law on Cross-Border Insolvency] includes recognition and enforcement of a judgment’ (see Practice Note: UNCITRAL model law on recognition and enforcement of insolvency-related judgments (MLIJ): Article X). Asset-backed security (ABS) A form of security anchored by asset pools, for example loans, leases, and credit card receivables. Assimilated law From 1 January 2024, ‘retained law’ has been retitled ‘assimilated law’. The body of domestic law originally arising from EU obligations, created by the European...