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Loan-linked hedging for the buy side – Part 2 (of 10): when things go wrong

26 September 2026 / Author(s): Jennifer B McLellan
Issue: October 2026 / Categories: Feature

This article examines hedging failures: premature trade terminations HedgeBK suspending ongoing settlement payments default contagion and adverse impact on hedged facilities. These emerge from different layers or facets of a trade. As an "ISDA Agreement" a trade faces termination risk and Section 2(a)(iii) Risk. Ongoing settlement payments by HedgeBK to HedgeCO may be suspended unpaid  under MA s 2(a)(iii). A weakness for all hedging products suspensions would...

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