Master Netting Agreement
/ˈmæs.tər ˈnet.ɪŋ əˌɡriː.mənt/
Definitions
- (n.) A contractual agreement that allows parties to net multiple financial obligations to one another into a single net payment obligation.
The parties entered into a master netting agreement to reduce credit risk by consolidating their payment obligations.
Forms
- master netting agreements
Related terms
Commentary
Master netting agreements are crucial in derivatives and financial transactions to mitigate counterparty risk by legally permitting the offsetting of mutual obligations.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.