Master Netting Agreements
Master netting agreements allow for the net settlement of transactions that are entered into between the same parties but that are governed by different agreements. Upon the occurence of a default, typically the non-defaulting party will determine the net amount due upon acceleration of all transactions under all agreements subject to the master netting agreement and the party owing the greater amount will be required to settle its debt through a single payment to its counterparty. ISDA has published the 2001 ISDA Cross-Agreement Bridge for energy transactions which is seldom used. Dealers typically serve-up their bespoke master netting agreements.