Lender market advisory: swap guarantees – keepwells and excluded obligations

The US Commodity Futures Trading Commission requirement that guarantors of swaps that are not entered into on designated contract markets must be "eligible contract participants" in loan documentation was introduced in order to ensure that guarantees of loan obligations are enforceable and swap providers maintain maximum credit support under the loan documents. The details and effects of these regulatory developments are discussed. This white paper also focuses in particular upon additional excluded collateral obligation provisions and guarantee/keepwell provisions.