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GMRA Anatomy™
In a Nutshell™ Clause 2(t):
2(t) Securities are “equivalent to” other Securities if they are:
- (i) of the same issuer;
- (ii) part of the same issue; and
- (iii) identical in type, nominal value, description and amount; provided that
- (A) Securities will still be equivalent if they are redenominated into euro or their nominal value changes as a result; and
- (B) where Securities are altered by a corporate event or their holders become entitled to receive any other property as a result, “equivalent to” will means those Securities as altered and any equivalent property due to such holders as a result;
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Global Master Repurchase Agreement full text of Clause 2(t):
2(t) Securities are “equivalent to” other Securities for the purposes of this Agreement if they are:
- (i) of the same issuer;
- (ii) part of the same issue; and (iii) of an identical type, nominal value, description and (except where otherwise stated) amount as those other Securities, provided that
- (A) Securities will be equivalent to other Securities notwithstanding that those Securities have been redenominated into euro or that the nominal value of those Securities has changed in connection with such redenomination; and
- (B) where Securities have been converted, subdivided or consolidated or have become the subject of a takeover or the holders of Securities have become entitled to receive or acquire other Securities or other property or the Securities have become subject to any similar event, the expression “equivalent to” shall mean Securities equivalent to (as defined in the provisions of this definition preceding the proviso) the original Securities together with or replaced by a sum of money or Securities or other property equivalent to (as so defined) that receivable by holders of such original Securities resulting from such event;
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The tedious provuso about the euro addresses the increasingly unlikely contingency that some more governments will throw their lot in with the European Central Bank now — the clear and present risk is the opposite, right? — so a bag of sweeties for the first person to advance an articulate argument for how you might read “into euro” to mean “from euro and back into the glorious Lira” etc. etc.
See also