The IECA has released its Master Netting Agreement, a state-of-the-art solution ensuring credit exposures are managed and netted under a single, integrated framework that is flexible and easy to implement.

On October 7, 2016, the International Energy Credit Association (“IECA”) released its Master Netting Agreement (the “MNA”) to be promptly followed by enforceability opinions prepared by Reed Smith LLP under both English and U.S. law.1 The MNA is billed as a state-of-the-art solution designed to manage the termination, close-out, and netting of both physical and financial transactions, including in the bankruptcy context.

Benefits to users of the new MNA include its ease of use, support by legal enforceability opinions under both English and U.S. law, flexibility of use under bespoke and traditional master trading agreements, and its intended use with a variety of energy-related commodities, metals, freight, and emissions and other environmental products.

Market participants that are party to multiple trading agreements with a single counterparty should review the MNA and consider its applicability where the importance of netting exposures is a priority under covered transactions