Letter of Credit - GMSLA Provision

2010 Global Master Securities Lending Agreement A Jolly Contrarian owner’s manual™ Resources and navigation 2010 GMSLA: Full wikitext · Nutshell wikitext | GMLSA legal code | GMSLA Netting Pledge GMSLA: Hard copy (ISLA) · Full wikitext · Nutshell wikitext | 1995 OSLA: OSLA wikitext | OSLA in a nutshell | GMSLA/PGMSLA/OSLA clause comparison table From Our Friends On The Internet: Guide to equity finance | ISLA’s guide to securities lending for regulators and policy makers Navigation 2010 GMSLA 1 · 2 · 3 · 4 · 5 · 6 · 7 · 8 · 9 · 10 · 11 · 12 · 13 · 14 · 15 · 16 · 17 · 18 · 19 · 20 · 21 · 22 · 23 · 24 · 25 · 26 · 27 · Schedule · Agency Annex · Addendum for Pooled Principal Agency Loans 2018 Pledge GMSLA 1 · 2 · 3 · 4 · 5 · 6 · 7 · 8 · 9 · 10 · 11 · 12 · 13 · 14 · 15 · 16 · 17 · 18 · 19 · 20 · 21 · 22 · 23 · 24 · 25 · 26 · 27 · 28 · Schedule · Agency Annex Stock Loan owner’s manuals: 2010 GMSLA · 2000 GMSLA · Pledge GMSLA · OSLA Index: Click ᐅ to expand: GMSLA Pledge GMSLA Clause Letter of Credit in a Nutshell™ Use at your own risk, campers! Letter of Credit means an irrevocable, non-negotiable bank letter of credit acceptable to Lender; view template Full text of Clause Letter of Credit Letter of Credit means an irrevocable, non negotiable letter of credit in a form, and from a bank, acceptable to Lender; view template Related agreements and comparisons Related agreements: Click here for the same clause in the 2018 Pledge GMSLA Related agreements: Click here for the same clause in the 1995 OSLA Comparison: There is no Letter of Credit in the 2018 Pledge GMSLA. Hence the redlink. Comparison: Template:Osladiff Letter of Credit Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

Content and comparisons

The Letter of Credit concept — a painful, formalistic and old-fashioned one, truth be told — didn’t make it from the 2010 GMSLA into the 2018 Pledge GMSLA, the theory being that the Borrower is engaged in raising finance - in the shape of liquid assets with decent credit quality that it can give back to its Treasury department, against the collateral of its portfolio of equities, convertible bonds and other dross it holds as collateral for its own margin lending activity. so what it would be doing collateralising such a trade with a bank-issued Letter of Credit you’d really have to wonder.

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Summary

... and a Letter of Credit is what, exactly?

An old fashioned form of credit support. A bank writes an unconditional letter promising to pay a (usually large) sum on money on demand and without argument to a third party on behalf of a client. This gets small companies a bit of breathing space with trade creditors. Banks charge through the nose for them: they are a form of committed funding.

Lots of formal rules and legal form-obeisance.

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See also

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