5.5 - GMSLA Provision: Difference between revisions
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====Summary==== | ====Summary==== | ||
In an {{nutshell}}: | |||
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Where {{gmslaprov|5.5}} applies, the {{gmslaprov|Posted Collateral}} in respect of any {{gmslaprov|Loan}} bears the same proportion to the {{gmslaprov|Market Value}} of the {{gmslaprov|Loaned Securities}} as the {{gmslaprov|Posted Collateral}} bore at the commencement of the {{gmslaprov|Loan}}. Accordingly: <br> | Where {{gmslaprov|5.5}} applies, the {{gmslaprov|Posted Collateral}} in respect of any {{gmslaprov|Loan}} bears the same proportion to the {{gmslaprov|Market Value}} of the {{gmslaprov|Loaned Securities}} as the {{gmslaprov|Posted Collateral}} bore at the commencement of the {{gmslaprov|Loan}}. Accordingly: <br> | ||
:(a) the {{gmslaprov|Market Value}} of the {{gmslaprov|Posted Collateral}} must always equal the {{gmslaprov|Required Collateral Value}}; <br> | :(a) the {{gmslaprov|Market Value}} of the {{gmslaprov|Posted Collateral}} must always equal the {{gmslaprov|Required Collateral Value}}; <br> | ||
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::(i) all amounts due by the {{gmslaprov|Borrower}} under the {{gmslaprov|Loan}}; and <br> | ::(i) all amounts due by the {{gmslaprov|Borrower}} under the {{gmslaprov|Loan}}; and <br> | ||
::(ii) any {{gmslaprov|Income}} payable under the {{gmslaprov|Equivalent Securities}}, {{gmslaprov|Borrower}} shall (on demand) provide further {{gmslaprov|Collateral}} to {{gmslaprov|Lender}} to eliminate the deficiency.<br> | ::(ii) any {{gmslaprov|Income}} payable under the {{gmslaprov|Equivalent Securities}}, {{gmslaprov|Borrower}} shall (on demand) provide further {{gmslaprov|Collateral}} to {{gmslaprov|Lender}} to eliminate the deficiency.<br> | ||
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====See Also==== | ====See Also==== | ||
{{gmslaanatomy}} | {{gmslaanatomy}} | ||
Revision as of 11:01, 18 May 2015
2000 Global Master Securities Lending Agreement
Para 5.5, 2000 GMSLA
Template:2000 GMSLA 5.5
Commentary
See also 5.4, Collateralisation on aggregate, which will generally be the preferred alternative for most financial institutions.
Summary
In an Nutshell™:
Where 5.5 applies, the Posted Collateral in respect of any Loan bears the same proportion to the Market Value of the Loaned Securities as the Posted Collateral bore at the commencement of the Loan. Accordingly:
- (a) the Market Value of the Posted Collateral must always equal the Required Collateral Value;
- (b) whenever the Market Value of the Posted Collateral for any Loan (including unpaid amounts and unpaid Income on Non-Cash Collateral) exceeds the Required Collateral Value under the Loan (including all amounts due by the Borrower and
- (ii) any Income payable in respect of Equivalent Securities,
- (ii) any Income payable in respect of Equivalent Securities,
- Lender shall repay to Borrower such Equivalent Collateral to eliminate the excess; and
- (c) whenever the Market Value of the Posted Collateral together with:
- (i) all amounts due by the Lender under the Loan; and
- (ii) any Income payable on Non-Cash Collateral
- (i) all amounts due by the Lender under the Loan; and
- falls below the Required Collateral Value together with:
- (i) all amounts due by the Borrower under the Loan; and
- (ii) any Income payable under the Equivalent Securities, Borrower shall (on demand) provide further Collateral to Lender to eliminate the deficiency.
- (i) all amounts due by the Borrower under the Loan; and
See Also
update to anat|gmsla
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