The Loan Syndications and Trading Association (LSTA) is publishing a revised set of documents for distressed transactions, as well as a revised Par/Near Par Trade Confirmation, effective for trades entered into on and after September 9, 2011. The most significant revisions will be to the Distressed Trade Confirmation, which will incorporate Buy-in/Sell-out (BISO) provisions to the Standard Terms and Conditions for Distressed Trade Confirmations. The new BISO provisions will allow a Performing Party that has performed its Settlement Delivery Obligations to terminate its obligations under the existing Distressed Trade Confirmation and enter into a Cover Transaction with a new counterparty upon certain conditions.
We have prepared an overview of the BISO structure, including a sample timeline of the BISO provisions as well as summaries of certain of those provisions. Click here to view.