Interest on Cash Margin - GMRA Provision

GMRA Anatomy™ Go Premium In a Nutshell™ Clause 4(f): 4(f) Indebtedness: A payment of Cash Margin creates indebtedness from the recipient to the payer. It will bear interest as specified in Annex I. view template Global Master Repurchase Agreement full text of Clause 4(f): 4(f) A payment of Cash Margin shall give rise to a debt owing from the party receiving such payment to the party making such payment. Such debt shall bear interest at such rate, payable at such times, as may be specified in Annex I hereto in respect of the relevant currency or otherwise agreed between the parties, and shall be repayable subject to the terms of this Agreement. view template Resources: 2010 GMRA: Full wikitext · Nutshell wikitext Navigation 2000 GMRA Table of Contents · 1 · 2 · 3 · 4 · 5 · 6 · 7 · 8 · 9 · 10 · 11 · 12 · 13 · 14 · 15 · 16 · 17 · 18 · 19 · 20 · 21 · Schedule · Equities Annex: EA 1 · EA 2 · EA 3 · EA 4 · EA 5 · Buy/Sellback Annex · BSA 1 · BSA 2 · BSA 3 · BSA 4 · BNA 5 Index: Click ᐅ to expand: GMRA Comments? Questions? Suggestions? Requests? Insults? We’d love to 📧 hear from you. Sign up for our newsletter.

A clause which states the bleeding obvious, as you will know if you’ve read our article on money, and then invites the counterparties to agree an interest rate in the Annex.

Note the difference here between Interest on Cash Margin under Clause 4(f) — set out in the Annex, and for those counterparties with alert legal eagles, likely to be SONIA (for sterling), EONIA (for euro) and Fed Funds Effective (for dollars), i.e. no longer that ghastly pariah LIBOR — and default interest under Clause 10(f), which is hard-coded to be LIBOR.

Is that a huge problem? In the scheme of things probably not.

Mention of LIBOR requires obligatory mention of the Dramatic look gopher, of course. So, without further ado, here you go.

See also

• Money
• LIBOR