Glossary

A · B · C · D · E · F · G · H · I · L · M · N · O · P · Q · R · S · T · U · V · W

A

Additional Termination Event

A Termination Event the parties add in the Schedule for themselves. Here there is one, the Facility Termination in Part 1(g). It let the bank end the swap once Atlas repaid its loan in full. Schedule, Part 1(g) · Chapter 11

Affected Party

The party a Termination Event happens to. It is not a party at fault. Under Part 1(g) Atlas is the only Affected Party, so the bank alone may end the swap and works out the close-out sum. Definition: Affected Party · Chapter 11

Affected Transactions

The trades a Termination Event ends, and no others. Atlas had Part 1(g) confined to the swap, so when the swap ended the cap ran on to the end of its term. Definition: Affected Transactions · Chapter 11

All-in cost

The cost of the loan and the hedge together: loan interest, plus what Atlas pays on the swap, less what it receives. In the first quarter it was €550,000. On the hedged part it stays the same whatever the fixing. Hedge Sheet 1 · Chapter 2

B

Basis risk

What is left when a hedge and its loan do not match exactly. Atlas's swap and loan read the same rate, but if the screen fails they fall back to different rates. A file note records that gap. Chapter 6

Benchmark (EURIBOR, €STR)

The published rate a floating payment reads, which neither party controls. Here the loan, the swap and the cap all read three-month EURIBOR, published in Brussels each business day, so they move together. Cash posted as collateral earns a different benchmark, €STR, the euro short-term rate. Rate Definitions: Floating Rate · FA definition: EURIBOR · Chapter 1 · Chapter 10

Bid, offer and mid

A dealer's two prices: the bid, at which it buys, and the offer, at which it sells. Mid is halfway between them. Statements on this file are at mid, but nobody deals at mid, so a party ending a trade gets a little less. Chapter 9

Break cost (swap) / Break Costs (loan)

Two terms with nearly the same name. The loan's Break Costs cover a lender's loss to the end of the current interest period, and were nil because Atlas prepaid on a period end. A swap's break cost is the value of every quarter left, and can run either way. Confirmation 3 · FA definition: Break Costs · Chapter 9

C

Calculation Agent

The party that turns each fixing into payment figures and sends the statements. Here it is the bank, which is normal. Atlas accepted that because Part 4 of the Schedule lets it dispute any figure within one Local Business Day. Schedule, Part 4.3 · Chapter 2 · Chapter 7

Calculation Period

One quarter of the swap, from one payment date to the next. The swap uses the loan's own quarters, and each full one counts as 90 days. The last period, to July 2031, is a short one of 48 days. Rate Definitions: Calculation Period · Chapter 2

Calculation statement

The written statement of the sum due when trades end early. It binds unless there is a manifest error, subject to the dispute route. The bank's first statement asked for €581,000, and after Atlas found two date errors the revised one asked for €486,000. Clause 6.4 · Chapter 12

Cap

An option on an interest rate. The buyer pays a premium once, and the seller then pays the excess of the fixing over the Cap Rate in any quarter where the rate is higher. Atlas bought a three-year cap on €10,000,000 at 4%. Confirmation 2 · Chapter 3

Capacity

A company's legal power to make the contract at all. Derivatives lawyers check it because in Hazell v Hammersmith (1992) a council's swaps were held void as beyond its powers. Board resolutions and incumbency certificates are the proof. Clause 3.1 · Chapter 5

Cap Rate

The level above which a cap pays: 4% here. At a 4% fixing the cap pays nothing, and at 5% it pays €25,000 a quarter on €10,000,000. Confirmation 2: Cap Rate · Chapter 3

Central counterparty (clearing)

A hub that stands between the two sides of a cleared trade, so each faces the hub and not the other. It calls margin from its members every day. Atlas cleared nothing, because its trades were private contracts on its loan's own dates. Schedule, Part 5.3 · Chapter 14

Cherry-picking

What an insolvency office-holder can do with separate contracts: enforce those that favour the failed company and leave the rest as claims. Putting every trade into one agreement stops it, because the trades then net to one sum. Clause 1.3 · Chapter 4

Close-out Amount

What it costs, or gains, to replace the ended trades. It is a replacement cost, never a fine, and can run either way. Here it was €786,000: the swap's value of €765,000, plus €21,000 for undoing the bank's own hedge. Clause 6.6 · Chapter 12

Close-out netting

Turning every ended trade and every unpaid sum into one net sum, owed one way. Here the Close-out Amount of €786,000, less Atlas's €300,000 of collateral, gave €486,000. It works because everything sits in one agreement. Clause 6.5 · Chapter 4 · Chapter 12

Collar

A cap bought and a floor sold together. The floor pays for the cap, so the cost to enter shrinks, often to nothing, but the buyer can owe again when rates fall. Atlas's policy allowed collars, and it bought none. Chapter 3

Collateral Annex

The annex under which cash moves to the side the trades have moved in favour of. The cash passes outright and is owed back as a debt. The annex is part of the single agreement, so Atlas's €300,000 came off the close-out sum. Annex, paragraph 1 · Chapter 10

Compliance Certificate

Atlas's report to the loan's Agent of its covenant figures. The Schedule makes Atlas send the bank's swap desk a copy, but only while the loan exists. When the loan was repaid, the copies stopped. FA definition: Compliance Certificate · Schedule, Part 3 · Chapter 5

Condition precedent to payment ("flawed asset")

The rule in clause 2.4 that a party need not pay while the other side is in default, or about to be. The payment is postponed, not cancelled, as Lomas v Firth Rixson (2012) held. In the first winter the bank could have held back €62,500, and paid anyway. Clause 2.4 · Chapter 7

Confirmation

The short record of one trade's terms. It is evidence of the bargain, not the bargain, because the trades bound on the recorded call. A party has two Local Business Days to object to an error, so check it against the loan on arrival. Clause 9.9 · Chapter 6

Consent letter

The lenders' letter that let Atlas hedge without breaching its loan. It makes hedging trades permitted debt whatever their value, counts their net payments as finance charges, and says the Master Agreement is not a Finance Document. The bank would not sign until it existed. Exhibit 1 · Chapter 5 · Chapter 13

Credit default swap

A premium paid for a payment if a named borrower suffers a credit event. It looks like insurance but is not, because the buyer need not own the debt or prove a loss. A name to recognise, not traded here. Chapter 14

Credit Support Balance

The cash one side has posted under the Collateral Annex and is owed back. Atlas's balance was €300,000 from May 2028, earning interest. When the swap ended, Atlas chose to count it as a sum the bank owed, so it came off the bill. Annex, paragraph 6 · Chapter 10 · Chapter 12

Credit support default

The Event of Default when a party fails to make a collateral transfer and does not put it right within two Local Business Days after notice. It makes a collateral call a legal deadline, not an invoice. Clause 5.1(c) · Chapter 10

Cross default (v cross-acceleration)

A default under the swap caused by a default on other borrowing above the Threshold Amount. Atlas's clause fires once the other debt can be declared due, so a loan covenant breach put the swap in default at once. Cross-acceleration would wait until the lenders called the loan in. Clause 5.1(f) · Chapter 8

D

Day count (30/360; actual/360)

How a period's days are counted against a 360-day year. On this file every full quarter counts as 90 days (30/360), so a quarter's payment is a quarter of a year's, and the loan counts the same way. Default interest counts the actual days (actual/360). Rate Definitions: Day Count Fraction · Chapter 2 · Chapter 7

Day-one value

What a new trade is worth at the close of its first day. Atlas's swap showed €20,000 in the bank's favour, which was the bank's dealing spread inside the fixed rate. It is a value, not a bill, and nothing is payable. Chapter 6 · Chapter 9

Dealer / end-user

A dealer, like the bank, quotes prices all day and passes each trade's risk on with a mirror trade. An end-user, like Atlas, hedges something real with one or two trades. Chapter 14

Default Rate

The rate on a sum paid late: the payee's cost of funds plus one percentage point, 3% here. It needs no Event of Default. Atlas paid €24 of it on the part of the close-out sum still unpaid after the due date. Definition: Default Rate · Chapter 7 · Chapter 12

Delivery Amount / Return Amount

The two directions of a collateral transfer. A Delivery Amount is a call for cash, rounded up to the nearest €10,000, and a Return Amount sends cash back, rounded down. Neither moves unless it reaches the €250,000 Minimum Transfer Amount. Annex, paragraph 2 · Chapter 10

Derivative

A contract whose payments are worked out from a number neither party controls, such as an interest rate, applied to an amount nobody lends. The number is the underlying and the amount is the notional. Definition: Transaction · Chapter 1

E

Early Termination Amount

The master agreement's name for the one net sum due when trades end early, payable by whichever side it runs against. On this file it was €486,000 from Atlas, after its collateral came off. Definition: Early Termination Amount · Chapter 12

Early Termination Date

The day trades end early, named in a notice. From that day their payments stop and one net sum replaces them. The bank designated 1 December 2028 for the swap. Definition: Early Termination Date · Chapter 11 · Chapter 12

EMIR / UK EMIR

The EU's rules for over-the-counter derivatives, and the UK's own version, which governs this file. For Atlas they meant reporting, timely confirmation and checking statements. They required no clearing and no collateral, because Atlas was below the clearing thresholds. Schedule, Part 5.4 · Chapter 14

Event of Default

A failure by one party, such as a missed payment, a breach of the agreement, a cross default or insolvency. Clause 5.1 lists eight. While one continues, the other party may end every trade, or none. Clause 5.1 · Chapter 8

Exposure

What one side would be owed if every trade ended on the valuation day, at mid. It nets the swap and the cap, and is never below zero. In May 2028 the bank's Exposure was €792,000, and the collateral call started from that. Annex, paragraph 8 · Chapter 10

F

Facility Termination (Part 1(g))

The Additional Termination Event in Part 1(g). If Atlas repaid its loan in full early, the loan was accelerated or Atlas stopped being the borrower, the bank alone could end the swap within 20 days. Limb (i) fired when Atlas refinanced. Schedule, Part 1(g) · Chapter 11

Finance Document (designation)

A document the loan treats as one of its own. Designating the Master Agreement as one would bring the loan's guarantee, sharing and voting rules to the swap. The consent letter says it is not one, so the swap has no guarantee. FA definition: Finance Document · Chapter 13

Financial Indebtedness limb (f)

The part of the loan's definition of debt that counts "any derivative transaction" at its marked-to-market value, never its notional. A mark in Atlas's favour counts for nothing. Without the consent letter, a mark against Atlas could have used up the loan's basket for other debt. FA definition: Financial Indebtedness · Chapter 13

Fixed leg / floating leg

The swap's two payment streams. Atlas pays the fixed leg, 3% on the notional, and receives the floating leg, three-month EURIBOR on the same notional and dates. Only the difference is paid each quarter, and traders call Atlas's position pay-fixed, receive-floating. Confirmation 1: Fixed Amounts · Chapter 2

Fixing Day

The day the floating rate is read, two TARGET Settlement Days before the quarter starts. The loan calls the same day its Quotation Day, so both contracts read the same rate on the same morning. Rate Definitions: Fixing Day · Chapter 2 · Chapter 6

Floor

A level below which a floating rate is not counted. The loan treats EURIBOR below zero as zero. Atlas declined a floor on the swap, priced at about €20,000 a year, and the Confirmation records that choice. Rate Definitions: Floor · Chapter 2

Floor mismatch

The gap left when the loan has a floor and the swap does not. If EURIBOR fixed below zero, the loan would stop at zero while Atlas paid extra on the swap. It never happened on this file, but the risk is real. Chapter 2

Forward / future

A forward fixes today the price of one exchange on a later date, and binds both sides. A future is the same promise in a standard size, traded on an exchange. Atlas traded neither. Chapter 1 · Chapter 3

FX forward, cross-currency swap, commodity swap

Three other derivatives on the same frame. An FX forward exchanges currencies later at today's price. A cross-currency swap exchanges interest in two currencies, with the principal swapped at each end, and a commodity swap pays a fixed price against a published one. Chapter 14

G

Gross-up

The rule that a payer who must withhold tax pays extra, so the payee receives the full amount. It does not apply where the tax comes from the payee's own link with the taxing country or from its untrue tax statement. Nothing was withheld on this file. Clause 2.5 · Chapter 7

H

Hedge

A second contract whose payments move the opposite way to the first. Laid over a floating-rate loan, a swap fixes the cost: it removes the rises and the falls. It works only while its notional, dates, rate and floor match the loan. Chapter 1

Hedge ratio

How much of the loan is hedged, as a share of the principal outstanding. After Atlas prepaid part of its loan, the swap and the cap covered 140% of it, above the policy's limit of 100%. Unwinding part of the swap brought it back. Hedge Sheet 4 · Chapter 9

Hedge Sheet

The one-page record the treasurer keeps of the loan and the hedge. Block A is the loan, block B the period's cash and block C the value and the collateral, each filled from its own notice. Cash and value never share a line. The Hedge Sheet record · Chapter 1 · Chapter 15

Hedging covenant

A loan term that requires the borrower to hedge. Atlas's first loan had none, so the board hedged under its own policy. The new loan from Vantry requires half of the term loan to be hedged for three years. Chapter 11 · Chapter 13

Hedging letter / intercreditor

In a secured deal, the papers that set what the borrower may hedge and rank the hedging bank among the creditors, usually equal with the loan. Atlas's loan was unsecured, so neither exists here. When you see that shape on a deal, escalate. Chapter 13

Hierarchy of documents

Which document wins a clash. A Confirmation beats the Schedule for its own trade, the Schedule beats the printed clauses, and the rate definitions yield to all three. The more specific document wins, so read a pack backwards, starting with the Confirmation. Clause 1.4 · Chapter 4

I

Interest rate swap

A swap of a fixed rate for a floating one on the same notional and dates, netted to one payment each quarter, so either side may end up paying. Atlas paid 3% and received three-month EURIBOR on €25,000,000, later €15,000,000. Only each quarter's net payment is cash. Confirmation 1 · Chapter 2

In-the-money / out-of-the-money

Desk shorthand for which way a trade's value runs today: a trade is in the money to the party that would be paid if it ended now. It says nothing about whether the hedge works. The file prefers "in whose favour", because it names a party. Chapter 9

L

Local Business Day

A day when London banks are open and the euro payment system works. Most deadlines in the agreement count in these days: one to dispute a figure, one to meet a collateral call and two to object to a Confirmation. Definition: Local Business Day · Chapter 7

M

Majority Lenders

Lenders holding more than two-thirds of the loan's total commitments, who can waive a term of the loan. The commitments include the revolving facility, so the base is €40,000,000, not the €35,000,000 term loan. The consent letter was signed by lenders with €31,000,000, more than three-quarters. FA definition: Majority Lenders · Chapter 5

Mark-to-market ("mark")

The bank's figure for what a trade is worth today, at mid. It moves every day and is a value, not a bill, so it becomes cash only when a trade ends. The loan counts the swap at its mark when the mark runs against Atlas. Chapter 5 · Chapter 9

Master agreement

One contract, signed before any trade, that governs every trade between the same two parties. Each trade is added by a short Confirmation. Because everything is one agreement, all the trades can be ended and netted to one sum. The training document · Chapter 1 · Chapter 4

Minimum Transfer Amount

The smallest collateral transfer either side must make: €250,000 here. It stopped one call in May 2028, when the sum was €245,000, and it kept Atlas's cash at the bank all summer. A sum that reaches it moves in full, rounded to the nearest €10,000. Annex, paragraph 2 · Chapter 10

Modified Following

The rule for a payment date on a weekend or holiday: move to the next business day, unless that is in the next month, and then move back. The draft Confirmation said plain "Following", and the junior had it corrected. Rate Definitions: Modified Following · Chapter 6 · Chapter 7

N

Negative pledge (as it meets an annex)

The loan's promise not to grant security beyond a small basket. The Collateral Annex passes cash outright and creates no security, so the negative pledge does not apply and nothing is registered. On other deals, check whether the clause also bans arrangements that work like security. FA Clause 18.2 · Chapter 10

Netting opinion / resolution stay

A netting opinion is a lawyer's yearly opinion, country by country, that close-out netting would survive an insolvency there. A resolution stay lets the authority rescuing a failing bank briefly stop its counterparties ending their trades. Chapter 14

Non-financial counterparty (clearing threshold)

A company that is not a bank, an insurer or a fund. Below the clearing thresholds it need not clear its trades or post collateral by law. Atlas states its status in Part 5 of the Schedule and must report any change. Schedule, Part 5.3 · Chapter 14

Non-reliance / relationship representations

Each party's statement that it deals for itself, on its own judgement, and does not rely on the other's advice. Springwell v JP Morgan (2010) held that such terms bind, so "the bank advised us" rarely succeeds. Atlas accepted it because it had its own treasurer, lawyers and policy. Clause 3.5 · Chapter 5

Notional

The amount the payments are worked out on. Nobody lends it, pays it or owes it. Atlas's swap was on €25,000,000, later €15,000,000, yet at its worst it was worth €793,000 to the bank. Definition: Notional Amount · Chapter 1

Novation (Transferor / Transferee / Remaining Party)

Replacing one party to a trade with a new one, with everyone's written consent. Moving the swap to Vantry was one way out in November 2028, but the new bank would have charged Atlas the swap's value through its rate. Clause 7.1 · Chapter 11 · Chapter 14

O

Option

A trade in which the buyer pays a premium once and may then receive payments, owing nothing more. A cap pays when a rate is above a level, and a floor when it is below one. Atlas's cap is the only option on this file. Definition: Option · Chapter 3

Orphaned swap

A swap left running after the loan it hedged has been repaid. Atlas's swap became one in November 2028. Its payments no longer offset any loan interest, so it was a bet on rates, not a hedge. Hedge Sheet 7 · Chapter 11

Over-the-counter (OTC) v exchange-traded

An over-the-counter trade is a private contract with one named bank, on your own amounts and dates. An exchange-traded contract is standard and cleared through a hub. Both of Atlas's trades were over the counter, so Atlas relies on the bank's own promise to pay. Chapter 1 · Chapter 14

P

Partial termination / unwind

Ending part of a trade early by agreement, for a payment. Confirmation 3 cut the swap from €25,000,000 to €15,000,000, and the bank paid Atlas €110,000. It says it is not a Termination Event and waives no rights. Confirmation 3 · Chapter 9

Party A / Party B

The documents' labels for the two sides: Party A is the dealer, Pellhaven Bank plc, and Party B is the company, Atlas. The dealer comes first by custom. Quoted clauses keep the letters, so check which side each line binds before you explain it. Parties · Chapter 4

Payment netting

Setting the amounts due on one date, in one currency, against each other, so only the difference is paid. On the first payment date, Atlas's €187,500 and the bank's €250,000 became one payment of €62,500 to Atlas. With one payment, neither side risks more than the difference. Clause 2.3 · Chapter 7

Potential Event of Default

An event that becomes an Event of Default once notice is given or time passes. While one continues, the other side may hold back its payments, and the party's collateral Threshold falls to zero. Definition: Potential Event of Default · Chapter 7 · Chapter 8

Premium

The price of an option, paid once. Atlas paid €100,000 for the cap, 1% of its notional, and owed nothing more under it. Definition: Premium · Chapter 3

Q

Quotation Day

The loan's name for the day its rate is read, two days before each interest period starts. The swap calls the same day its Fixing Day, so the loan and the swap read the same rate. FA definition: Quotation Day · Chapter 6

R

Remaining-differences table

A pencil rebuild of a swap's value: the rate gap on each quarter left, added up. On Atlas's €15,000,000 it was €75,000 for each of ten quarters and €40,000 for the last short period, €790,000 in all. The bank's model then took €25,000 off. Chapter 12

Replacement cost

What it would cost to replace a trade's remaining payments today. The Close-out Amount is a replacement cost, not a fine: Atlas paid the rest of the fixed rate it had agreed, collected in one sum. Clause 6.6 · Chapter 12

Representations and undertakings

Representations are facts each side states, on signing and again on every Trade Date. Undertakings are promises that last as long as the agreement, such as sending documents and reporting defaults. Clauses 3 and 4 hold them. Clause 3 · Clause 4 · Chapter 5

Reservation of rights

A letter that keeps a right alive without using it. In the first winter the bank reserved its rights to hold back payment and to end the trades, then paid Atlas in full "without waiver". Exhibit 4 · Chapter 8

Reset Date

The first day of each quarter of the swap, when the new rate starts to apply. The rate itself is read two TARGET Settlement Days earlier, on the Fixing Day. Rate Definitions: Reset Date · Chapter 2

S

Schedule

The part of the master agreement where the two parties make their choices. The printed clauses are a menu, and the Schedule is the order: thresholds, termination events, deliveries and the dispute route. The negotiation happens here. Definition: Schedule · Chapter 4

Set-off

Setting a sum owed under one agreement against a debt under another between the same parties. It is not netting, which works inside one agreement. Clause 6.7 allowed it, but nothing was left to set off when the swap ended. Clause 6.7 · Chapter 7 · Chapter 13

Single agreement

Clause 1.3, which makes the master agreement, the Schedule, the annexes and every Confirmation one contract. It lets all the trades net to one sum, so an insolvency office-holder cannot cherry-pick. Banks hold a legal opinion for each country that this would survive an insolvency there. Clause 1.3 · Chapter 4

Specified Entity / Specified Transaction / Specified Information

A Specified Entity is a group company whose default counts as the party's own, and here there is none. A Specified Transaction is another derivative whose default counts. Specified Information is what Part 3 makes each side deliver and state to be accurate. Schedule, Part 1(a) · Chapter 5 · Chapter 8

Specified Indebtedness

The borrowing that counts for cross default. For Atlas the Schedule expressly includes its loan, which is why the loan's covenant breach became a default under the swap. Definition: Specified Indebtedness · Chapter 8

Standard forms, the market's recommended

The published model documents the market builds on, from ISDA: a printed master text, a schedule of choices, rate definitions and a collateral annex. This file follows their shape without their words, and the parties negotiate only the choices. Lawyers call the master text "the ISDA". The training document · Chapter 4 · Chapter 14

Swap

Two streams of payments on the same notional and dates, netted to one payment each time. It is two-way: either side may owe next quarter, which is why the swap, unlike the cap, needs collateral. Chapter 1 · Chapter 2

T

TARGET Settlement Day

A day the euro payment system is open. Fixing Days count in these days, but payments also need a London business day, so an English bank holiday can move a payment but not a fixing. Keep both calendars in the same diary. Rate Definitions: Business Days · Chapter 6 · Chapter 7

Termination Event

A reason to end trades early that involves no fault, such as illegality, a tax event or an event the Schedule adds. It ends only the Affected Transactions, not every trade. Atlas's refinancing triggered one. Clause 5.2 · Chapter 8 · Chapter 11

Termination Rate

The payee's cost of funds, 2% here. It runs on the close-out sum from the Early Termination Date to the due date. After that, the Default Rate applies to anything still unpaid. Definition: Termination Rate · Chapter 12

Threshold (collateral)

The Exposure a side may run before it must post cash: €500,000 for Atlas and €2,000,000 for the bank. It falls to zero while that side is in default. Do not confuse it with the Threshold Amount. Annex, paragraph 9 · Chapter 10

Threshold Amount (cross default)

How much other borrowing must be in default before the cross default fires: €5,000,000 for Atlas, raised from the €2,000,000 the bank first asked for. It is a different number from the collateral Threshold. Definition: Threshold Amount · Chapter 4 · Chapter 8

Time decay

The shrinking of a swap's value as quarters are paid and fewer remain. A swap in its last year is worth little, however far rates have moved. Chapter 9

Title transfer (v security interest)

The way the Collateral Annex works: posted cash becomes the receiver's outright and is owed back as a debt. No security is created, so the loan's negative pledge does not apply. Atlas then carries credit risk on the bank for its cash. Annex, paragraph 3 · Chapter 10

Total Net Debt

The loan's measure of borrowing for its leverage test. It leaves out limb (f), so the swap's mark never moves that test, though the mark counts as Financial Indebtedness. FA definition: Total Net Debt · Chapter 13

Total return swap

A swap in which one party passes on the whole return of an asset it keeps, and is paid a rate in return. It works like a loan in the shape of a swap. A name to recognise, not traded here. Chapter 14

Trade Date / Effective Date / Termination Date

The day a trade is agreed, the day its payments start to build up, and the day it ends. For the swap: 24 November 2026, 26 November 2026 and 14 July 2031, the loan's own end date, after a draft error was corrected. Confirmation 1: Trade Date · Chapter 6

Transaction

One trade under the master agreement, recorded in its own Confirmation. There were two here, the swap and the cap. Confirmation 3 reduced the swap and created no new trade. Definition: Transaction · Chapter 4

Treasury Policy

The board's rule that Atlas hedge between half and all of its floating-rate term debt, for at least three years, with relationship banks only. It, not the loan, is why there is a hedge. It also forced a cure when a prepayment left the loan over-hedged. Exhibit 0 · Chapter 1

Two hats (Agent v counterparty)

The bank's two roles: Agent and lender under the loan, and the other party to the swap. A notice or a waiver in one role does not count in the other, so the waiver letter needed a separate paragraph for the swap. Schedule, Part 5.1 · Chapter 2 · Chapter 8

U

Underlying

The number a derivative's payments are worked out from, which neither party controls. Here it is three-month EURIBOR, the loan's own rate, which is why the hedge works. Definition: Underlying · Chapter 1

Unpaid Amounts

Sums due on or before the Early Termination Date and not paid. They go into the close-out sum beside the Close-out Amount. A payment due later is already inside the Close-out Amount, so the bank's claim for the next quarter was withdrawn. Definition: Unpaid Amounts · Chapter 12

V

Valuation Agent / Valuation Date / Valuation Time

Who values the trades for collateral, and when. The bank values them each Monday, or on the next business day after a holiday, using the figures at the close of the business day before. Annex, paragraph 5 · Chapter 10

W

Waiver letter

The lenders' letter of March 2027 waiving Atlas's covenant breach under the loan. Atlas's solicitors added a paragraph in which the bank, as party to the swap, waived the cross default under the Master Agreement too. Without it, the swap would have stayed in default after the loan was clean. Exhibit 4 · Chapter 8