Skip to main content

Legal Update

Is a party obliged to pay negative interest on collateral provided under an English-law ISDA CSA?

10 August 2018
Mayer Brown Legal Update
Parties to an ISDA Master Agreement may choose to enter into a Credit Support Annex whereby one or both parties are obliged to post collateral. Commonly, there will be an obligation for the party receiving the collateral to pay interest on it, with the aim of making the provision of collateral reasonably economically neutral for both parties.

But what happens if the relevant reference interest rate is in effect negative? Does the party that posts collateral also have to pay interest on it to the receiving party? That is the question at the heart of a case recently considered by the English Court.


  • Chris Roberts
    T +44 20 3130 3543
  • Susan Rosser
    T +44 20 3130 3358
  • Ian McDonald
    T +44 20 3130 3856
  • Chris Arnold
    T +44 20 3130 3610
The Build a Report feature requires the use of cookies to function properly. Cookies are small text files that are placed on your computer by websites that you visit. They are widely used in order to make websites work, or work more efficiently. If you do not accept cookies, this function will not work. For more information please see our Privacy Policy

You have no pages selected. Please select pages to email then resubmit.