Writedown

This Issue in United States

Writedown

Concept of Writedown in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): A payment in a PAUG from seller to buyer which arises from a permanent diminution in the value of the underlying ABS, for example the underlying assets are insufficient to pay the liability to the ABS holder. The result of the payment is the principal amount outstanding of the ABS is written down to the value of the underlying assets. The PAUG documentation provides for implied writedown for those bonds that have no specific writedown clause.

Resources

See Also

• Derivatives Contract