Waiver of Immunity - GMSLA Provision
GMSLA Anatomy™
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Sovereign immunity is a particular issue in an agency lending arrangement because:
- Structurally, sovereigns will tend to be lenders in an agency set up
- The Borrower title transfers away a bigger slug of collateral away than it borrows from the sovereign Lender.
- At any point, should the Sovereign decide to play who’s Queen, the borrower is in the hole for 5.
Interestingly, a pledge GMSLA might fix this problem by never transferring collateral to the Sovereign in the first place.