Ratings Downgrade Clause Samples
A Ratings Downgrade clause sets out the actions or consequences that occur if a party's credit rating is lowered by a recognized rating agency. Typically, this clause may require the downgraded party to provide additional collateral, repay obligations early, or take other remedial steps to mitigate increased credit risk. Its core function is to protect the non-downgraded party from heightened financial risk by ensuring there are predefined responses to a deterioration in creditworthiness.
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Ratings Downgrade. Failure by Party A to take any action required under the ratings downgrade provisions set forth below, unless Rating Agency Confirmation (as defined in the Pooling and Servicing Agreement) has been obtained notwithstanding such failure. If either:
(A) At any time the senior unsecured debt rating of Party A or Party A's Credit Support Provider, whichever is higher, assigned by S&P falls (x) below "A-1" for its short term rating, or (y) if no short term rating by S&P is available, below "A+" for its long term rating (the "S&P REQUIRED RATINGS"); or
(B) At any time the senior unsecured debt rating of Party A or Party A's Credit Support Provider, whichever is higher, assigned by Fitch falls (x) below "F-1" for its short-term rating or (y) if no short-term rating by Fitch is available, below "A+" for its long-term rating (the "FITCH REQUIRED RATINGS"); or
(C) At any time the senior unsecured debt rating of Party A or Party A's Credit Support Provider, whichever is higher, assigned by DBRS falls (x) below "R-1(low)" for its short-term rating or (y) if no short-term rating by DBRS is available, below "A (high)" for its long-term rating (the "DBRS REQUIRED RATINGS"); then, Party A shall, or shall cause its Credit Support Provider to, within 30 days of the date of such downgrade:
(I) transfer all of its rights and obligations under this Agreement to
(A) a United States entity which has all of the Required Ratings, or
(B) a non US entity which (x) has all of the Required Ratings and (y) agrees unconditionally to gross up and, in connection therewith, also agrees that (1) Section 2(d)(i)(4) of the Agreement shall be amended to require such non US entity unconditionally to gross up in the event that a withholding tax is imposed on payments being made by such non US entity, (2) the definition of "indemnifiable tax" shall be amended to cover any and all withholding tax, (3) the provision in Section 2(d)(i)(4) of the Agreement allowing such non US entity to be excused from having to "gross up" due to Party B's breach of a tax representation or failure to notify, non US entity of a breach of a tax representation shall be deleted, and (4) Section 2(d)(ii) of the Agreement shall be amended to delete any obligation by Party B to make payments to such non US entity for any payments made by such non US entity without deduction for taxes (for which there is no obligation on the part of the non US entity to gross up), provided that there shall not be any such amendment for any p...
Ratings Downgrade. For purposes of each Transaction:
Ratings Downgrade. (i) If, as a result of the withdrawal or downgrade of its credit rating by a Designated Rating Agency, Party A does not have any of the following:
(a) a long term credit rating of at least [A+] by S&P;
(b) a short term credit rating of at least [A-1] by S&P;
(c) a short term credit rating of at least [P-1] by Moody's
(d) a long term credit rating of at least [A2] ▇▇ ▇▇ody's;
(e) a short term credit rating of at least [▇▇] ▇▇ Fitch Ratings; or
(f) a long term rating of at least A by Fitch Ratings Ratings; and in the case of a downgrade by Fitch Ratings, Moody's or S&P, such a downgrade would, except for this ▇▇▇▇▇▇ adversely affect the rating of the relevant securities, Party A shall:
(1) within 30 Local Business Days (or within such greater period as is agreed to in writing by the relevant Designated Rating Agency) of a downgrade of its long term credit rating by S&P to not lower than [BBB] together with a downgrade of its short term credit rating by S&P to not lower than [A-2], or the downgrade of its long term credit rating by Moody's to not lower than [A3] with a downgr▇▇▇ ▇▇ its short term Moody's rating to not lower than [P-1] or th▇ ▇▇▇▇▇rade of its long term credit rating by Fitch Ratings to not lower than [A] together with a downgrade of its short-term credit rating by Fitch Ratings to not lower than [F1], comply with Part 5(t)(ii) or Part 5(t)(iii) of this Schedule; or
(2) within 10 Local Business Days (or within such greater period as is agreed to in writing by the relevant Designated Rating Agency) of any other such withdrawal or downgrade of Party A's short term or long term credit rating by the relevant Designated Rating Agency not already covered in Part 5(t)(i)(f)(1) of this Schedule, comply with Part 5(t)(ii) or Part 5(t)(iii) of this Schedule provided that Part 5(t)(ii)(a) of this Schedule will not apply where the long term credit rating falls to [BBB+] (or less) by Fitch Ratings and the short term credit rating falls to [F2] (or less) by Fitch Ratings.
(ii) (a) In respect of each Transaction, lodge cash collateral (the "CASH COLLATERAL") with an Approved Bank to the account of Party B (to be used by Party B solely for the purpose of discharging Party A's obligations under the relevant Transaction) in an amount equivalent to the Cash Collateral Amount as defined in Part 5(t)(iv)(a) of this Schedule. If on the last Local Business Day in any subsequent week during the life of the relevant Transaction the aggregate value of the Cash Collatera...
Ratings Downgrade. (a) (DOWNGRADE): If, as a result of the reduction or withdrawal of the credit rating of Party A, Party A is assigned a credit rating by a Rating Agency less than the relevant Prescribed Rating, Party A must by the expiry of the Prescribed Rating Period in relation to the credit ratings assigned by the Rating Agencies to Party A at that time (or such greater period as is agreed to in writing by each relevant Rating Agency), at its cost alone and at its election:
(i) provided that the short term credit rating by S&P is greater than or equal to A-1 or the long term credit rating by S&P is greater than or equal to A-, lodge collateral in accordance with the Credit Support Annex in an amount equal to the Collateral Amount as defined in Part 5(22)(b) of this Schedule;
(ii) enter into an agreement novating Party A's rights and obligations under this Agreement and each Transaction to a replacement counterparty acceptable to the Manager and which the Rating Agencies confirm in writing will not result in a reduction, qualification or withdrawal of the credit ratings then assigned by them to the Relevant Notes; or
(iii) enter into such other arrangements in respect of each Transaction which the Rating Agencies confirm in writing will not result in a reduction, qualification or withdrawal of the credit ratings then assigned by them to the Relevant Notes. Notwithstanding that Party A has elected to satisfy its obligations pursuant to this Part 5(22)(a) in a particular manner, it may subsequently and from time to time vary the manner in which it satisfies its obligations pursuant to this Part 5(22)(a) (but will not be entitled to any additional grace period in relation to such a variation).
Ratings Downgrade. The Borrower fails to perform or comply with any of the obligations expressed to be assumed by it in Clause 6 (Ratings Downgrade).
Ratings Downgrade. (a) If BSFP fails to satisfy the Required Ratings (a “Ratings Event”), then BSFP shall, at its own expense and subject to the Rating Agency Condition, either
(i) assign this Transaction to an entity that satisfies (or whose credit support provider satisfies) the Required Ratings;
(ii) obtain a guaranty of an entity that satisfies the Required Rating to guaranty BSFP’s obligations under this Transaction; or
(iii) take any other action that satisfies the Rating Agency Condition; providedthat the failure by BSFP to take any action specified in (i)-(iv) above on or prior to the 30th calendar day after such Ratings Event shall constitute an Additional Termination Event under the ISDA Form Master Agreement with respect to which BSFP shall be the sole Affected Party and this Transaction shall be the sole Affected Transaction.
(b) If BSFP fails to satisfy the Replacement Ratings (a “Replacement Event”), then BSFP shall, at its own expense and subject to the Rating Agency Condition, either:
(i) assign this Transaction to an entity that satisfies (or whose credit support provider satisfies) the Required Ratings;
(ii) obtain a guaranty of an entity that satisfies the Required Rating to guaranty BSFP’s obligations under this Transaction; or
(iii) take any other action that satisfies the Rating Agency Condition; Reference Number: FXNEC9564 U.S. Bank National Association, not individually, but solely as trustee on behalf of Citicorp Mortgage Securities Trust, Series 2007-4 May 29, 2007 Page of 12 of 18 providedthat the failure by BSFP to take any action specified in (i)-(iii) above on or prior to the 10th Local Business Days after such Replacement Event shall constitute an Additional Termination Event under the ISDA Form Master Agreement with respect to which BSFP shall be the sole Affected Party and this Transaction shall be the sole Affected Transaction. As used herein,
Ratings Downgrade. Subsequent to the execution and delivery of this Agreement (i) no downgrading shall have occurred in the rating accorded the Company’s debt securities or preferred stock by any “nationally recognized statistical rating organization” (as that term is defined by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations), and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s debt securities or preferred stock.
Ratings Downgrade. For purposes of each Transaction:
(i) CERTAIN DEFINITIONS.
Ratings Downgrade. Since the date hereof, there shall not have occurred any downgrading in the ratings accorded the Notes or any other securities of RELX by any “nationally recognized statistical rating organization” (as that term is defined in Section 3(a)(62) of the Exchange Act) and no such organization shall have informed the Issuer or the Guarantor or made any public announcement that such organization has under surveillance or review, or intends to or may potentially decrease, its rating of the Notes or any other securities of RELX (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating).
Ratings Downgrade. (a) For the purpose of this Part 5(9), the following additional definitions apply: