Swaptions: ‘Agreed Discount Rate’ Supplement to the 2006 ISDA Definitions Published

Supplement 64 to the 2006 ISDA Definitions has been published today, March 30, 2020 to allow parties to specify a discount rate in swaption confirmations for which ‘Cleared Physical Settlement’ or ‘Collateralized Cash Price Cash Settlement Method’ is applicable. The ISDA Collateral Cash Price Matrix has also been updated to align the discount rates specified with expected changes in the discount rates used by clearing houses for euro and US dollar.

ISDA has also published a Guidance Note and a Memorandum explaining the changes.

On April 6, ISDA held a market education call to go through the changes introduced in the Supplement and Matrix and answer questions. A recording of the call, as well as a slide presentation, is available here.

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