Demand for Collateral Clause Samples
The Demand for Collateral clause gives one party the right to require the other party to provide additional security or collateral under certain circumstances, such as a decline in creditworthiness or a change in market conditions. In practice, this means that if the value of existing collateral falls below a specified threshold or if there are concerns about a party’s ability to fulfill its obligations, the party at risk can formally request more collateral to be posted. This clause serves to protect the requesting party from potential losses by ensuring that sufficient assets are available to cover obligations, thereby reducing credit risk and promoting financial stability in the contractual relationship.
Demand for Collateral. Without prejudice to any provision of this Agreement, if a Delivery Amount for a Valuation Date equals or exceeds the Pledgor's Minimum Transfer Amount, then the Pledgor will, without prior demand by the Secured Party, Transfer to the Secured Party Eligible Credit Support in accordance with Paragraph 3(a).
Demand for Collateral. (a) Notwithstanding anything herein to the contrary, the Pledgor may only Pay or Deliver Collateral to the Secured Party or cause the issuance of Letters of Credit in favor of the Secured Party with respect to a Swap Transaction to the extent so provided herein or in the related Confirmation. On any Business Day, the Calculation Agent shall, upon written request from Counterparty, provide Counterparty with its calculation of the Aggregate Collateral Requirement and the aggregate Value of Collateral.
(b) Unless provided otherwise in the Confirmation confirming a Swap Transaction, by written notice to the Pledgor, the Secured Party may as of the first Business Day of each calendar week after a Security Event has occurred with respect to a Swap Transaction when the Aggregate Collateral Requirement exceeds an amount equal to or greater than the Pledgor Threshold Amount, require the Pledgor to comply with the provisions of Section 2(c) of this Agreement; provided, however, that if at any time (X) a Pledgor (or The Goldman Sachs Group, L.P. with respect to Goldman as Pledgor) has outstan▇▇▇▇ ▇▇ng-term, unsecured, unsubordinated debt securities which are rated below Baa3 or BBB- by either Moody's or S&P, respectively, or (b) after a Pledger has Delivered or Paid Collateral pursuant to Section 2(c), the Ag▇▇▇▇▇▇▇ Collateral Requirement exceeds by US $1,000,000 or more the Value of Collateral held by the Secured Party (a Subsequent Threshold Event") then the Secured Party can require the Pledgor to comply with Section 2(c) on any Business Day after a Security Event has occurred or of any Subsequent Threshold Event, as the case may be. Such notice shall specify the Aggregate Collateral Requirement, shall provide details of the manner in which the Aggregate Collateral Requirement was determined, and shall (unless previously notified to the Pledgor) specify any account or other information necessary for the issuance of, Delivery, or Payment of Collateral.
(c) Unless provided otherwise in the Confirmation confirming a Swap Transaction, the Pledgor shall, within two Business Days of receipt of such notice (if received by 11:00 a.m. New York time on a Business Day), cause one or more Letters of Credit to be issued in favor of the Secured Party or Pay or Deliver other Collateral to the Secured Party having an aggregate Value of not less than an amount equal to (i) the Aggregate Collateral Requirement on the date of and as specified in such notice, minus (ii) the Pledgor T...