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Counterparty |
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Counterparty Counterparty A person or institution engaging in a transaction. That is, the buyer and the seller of a good are the counterparties to the sale of that good. While it could apply to any transaction, the term is most common when referring to the counterparties of a swap. Counterparty. In any financial contract, the persons or institutions entering the contract on the opposite sides of the transaction are called the counterparties. For example, if you sign a contract to sell an item that you produce to a buyer, you and the buyer are counterparties to the contract. Similarly, the counterparties in financial transactions known as forwards or swaps are the banks or corporations that make deals between themselves to protect future cash flows or currency values. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| Non-payment of interest or principal or bankruptcy filing of the swap counterparty are defined as termination events for the CDS contract, which in turn triggers an early termination of the structured finance transaction under the documentation. The proposed procedures recognize that Lehman is not free to simply "terminate" a derivatives contract that is "in the money" unless its counterparty has defaulted and Lehman would have been able to terminate the contract outside of bankruptcy. Asahi's asset quality remains extremely weak,'' it said, adding the outlook on Asahi Mutual's counterparty credit rating is negative. |
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