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RE: FpML-CD40 Proposal to extend CDS message to include fixedRecoveryPercent field.



Brock:

We actually haven't gotten many (any?) questions regarding cash settled
trades on the mailing list over the years. 

However, since we do support the ISDA long form, we do support the
representation of cash settlement terms. I think we should take a look at
the element creditDefaultSwap/cashSettlementTerms/cashSettlementAmount.
Here's how we define this element in the schema:

"The amount paid by the seller to the buyer for cash settlement on the
cash
settlement date. If not otherwise specified, would typically be calculated
as 100 (or the Reference Price) minus the price of the Reference
Obligation
(all expressed as a percentage) times Floating Rate Payer Calculation
Amount. ISDA 2003 Term: Cash Settlement Amount"

This seems pretty similar to the usage you are proposing for
fixedRecoveryPercent. Granted, it's not a percent but an actual amount,
but
since you have the calculation amount you should be to convert to an
amount.
What do you think?

Ben Lis
Deputy CTO
creditex, Inc.
212-633-7277

-----Original Message-----
From: Arnason, Brock (FID) [mailto:Brock.Arnason@xxxxxxxxxxxxxxxxx] 
Sent: Wednesday, February 09, 2005 7:54 AM
To: cd@xxxxxxxxxxxxxxxxxxxxxx
Subject: RE: FpML-CD40 Proposal to extend CDS message to include
fixedRecoveryPercent field.

Agree, for consistency we should opt for fixedRecoveryRate and represent
as
0.4.

We've been having a fun time tracking down documentation examples.  Near
as
I can tell, the field does NOT appear in standard ISDA long form
documentation; it appears to trigger manual confirmation and insertion of
a
specific clause.

Sincerely,
Brock

-----Original Message-----
From: Guy Gurden [mailto:guy.gurden@xxxxxxxxxxxxx]
Sent: Wednesday, February 09, 2005 7:44 AM
To: cd@xxxxxxxxxxxxxxxxxxxxxx
Subject: RE: FpML-CD40 Proposal to extend CDS message to include
fixedRecoveryPercent field.

I'm not going to be able to attend the meeting today.

One small suggestion. From a naming consistency perspective may be better
to
call this element fixedRecoveryRate. A value of 40% would be represented
as
0.4 (same as how other rates are represented in FpML).

Is there a corresponding ISDA-defined term for this?

Regards
Guy
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