Credit Support Agreement Template for Germany

The Credit Support Agreement is essential in financial transactions where parties need to manage counterparty credit risk through collateral arrangements. This document is commonly used in derivatives trading, securities lending, and other financial transactions where credit exposure needs to be secured. Under German law, these agreements must comply with both domestic regulations (such as the German Civil Code and Banking Act) and EU directives (particularly the Financial Collateral Directive). The agreement typically details collateral requirements, valuation methods, transfer procedures, and enforcement rights, while considering German law requirements for financial collateral arrangements and perfection of security interests. It's particularly important in the context of EMIR compliance and other regulatory requirements applicable to financial institutions operating in Germany.

1. Parties: Identification of the parties entering into the agreement, including their legal names, registration details, and addresses

2. Background: Context of the agreement, reference to any master agreement, and purpose of the credit support arrangement

3. Definitions and Interpretation: Comprehensive definitions of terms used in the agreement, including financial terms, collateral types, and calculation methodologies

4. Credit Support Obligations: Core provisions defining when and how collateral must be posted, including delivery timing and threshold amounts

5. Valuation and Calculations: Methods for calculating exposure, collateral value, and margin requirements

6. Transfer and Custody of Collateral: Procedures for transferring, holding, and maintaining collateral

7. Representations and Warranties: Standard and specific representations regarding capacity, authority, and collateral ownership

8. Rights and Obligations: Ongoing obligations of the parties regarding collateral maintenance and reporting

9. Events of Default: Definition of default events and their consequences

10. Enforcement Rights: Rights and procedures following an event of default, including collateral liquidation

11. Tax Provisions: Treatment of tax obligations related to collateral and transfers

12. Notices: Communication procedures and contact details

13. Governing Law and Jurisdiction: Confirmation of German law governance and jurisdiction provisions