Examples of Synthetic Security in a sentence
However, as a result of the terms of the Synthetic Security and the assumption of the credit risk of the applicable Synthetic Counterparty, a Synthetic Security may have a different expected return, a different (and potentially greater) probability of default, a different (and potentially greater) expected loss characteristic following a default and a different (and potentially lower) expected recovery following default.
A Synthetic Security shall constitute a Credit Impaired Obligation in the event that the Reference Obligation to which such Collateral Debt Obligation is linked would constitute a Credit Impaired Obligation if it were itself a Collateral Debt Obligation.
For the purposes of the Portfolio Management Agreement, the purchase price of any Portfolio Asset that is a Synthetic Security shall include the principal amount of any Synthetic Collateral required to be posted.
As part of the acquisition or entry into of a Synthetic Security which is an unfunded credit default transaction, the Issuer or the Portfolio Manager, acting on the Issuer's behalf, will be required to provide collateral to the applicable counterparty (“Synthetic Collateral”) the principal amount of which is not less than 100 per cent.
As referred to above, a Synthetic Security which is a Defaulted Obligation will generally be settled either by a cash settlement or a physical settlement.