Delivery obligations to be reciprocal - GMSLA Provision
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GMSLA Anatomy™
Neither Party shall be obliged to make delivery (or make a payment as the case may be) to the other unless it is satisfied that the other Party will make such delivery (or make an appropriate payment as the case may be) to it. If it is not so satisfied (whether because an Event of Default has occurred in respect of the other Party or otherwise) it shall notify the other Party and unless that other Party has made arrangements which are sufficient to assure full delivery (or the appropriate payment as the case may be) to the notifying Party, the notifying Party shall (provided it is itself in a position, and willing, to perform its own obligations) be entitled to withhold delivery (or payment, as the case may be) to the other Party until such arrangements to assure full delivery (or the appropriate payment as the case may be) are made.
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This provision allows a Counterparty to suspend payments or deliveries pending satisfactory arrangements where it is concerned as to the creditworthiness of its counterparty.
Otherwise a creditworthy Borrower would be obliged to redeliver Equivalent Securities to a bankrupt Lender even though it did not expect to receive its Equivalent Collateral back, which would prejudice its ability to effect a mini close-out and set off its obligation to deliver Equivalent Securities against that Collateral return.
8.6 in a Nutshell™ (gmsla edition)
8.6 Delivery obligations to be reciprocal: Neither Party has to pay or deliver anything unless it is satisfied that the other Party will make the corresponding payment or delivery to it. If it is not, as long as it is willing and able to perform its own obligations it may, by notice to the other Party, withhold delivery or payment until the other Party has made sufficient arrangements to assure full delivery or payment.