Interpretation (Agency Addendum) - GMSLA Provision

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2010 Global Master Securities Lending Agreement
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GMSLA

Clause Interpretation (Agency Addendum) in a Nutshell
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Addendum 2. Interpretation (Agency Addendum)
2.1 In this addendum:

(a) Collateral Transfer is defined in paragraph Addendum 5.1 below;
(b) Net Loan Exposure:
(i) If the aggregate Market Value of Posted Collateral between the Borrower and any one Principal exceeds the total Required Collateral Value for all Agency Loans between them, Borrower has a Net Loan Exposure to that Principal equal to that excess.
(ii)If it is less than the Required Collateral Value, the Principal has a Net Loan Exposure to Borrower equal to the shortfall.
(c) Pooled Principal is defined in paragraph Addendum 6(a) below; and
(d) Pooled Loan is defined in paragraph Addendum 6(a) below.

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Full text of Clause Interpretation (Agency Addendum)

2. Interpretation (Agency Addendum)
2.1 In this addendum:

(a) Collateral Transfer has the meaning given in paragraph 5.1 below;
(b) if at any time on any Business Day the aggregate Market Value of Posted Collateral in respect of all Agency Loans outstanding with a Principal under the Agreement exceeds the aggregate of the Required Collateral Value in respect of such Agency Loans, Borrower has a Net Loan Exposure to that Principal equal to that excess; if at any time on any Business Day the aggregate Market Value of Posted Collateral in respect of all Agency Loans outstanding under the Agreement with a Principal falls below the aggregate of the Required Collateral Value in respect of such Agency Loans, that Principal has a Net Loan Exposure to Borrower for such Agency Loans equal to that deficiency;
(c) Pooled Principal has the meaning given in paragraph 6(a) below; and
(d) Pooled Loan has the meaning given in paragraph 6(a) below.

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Related agreements and comparisons

Related agreements: Click here for the same clause in the 2018 Pledge GMSLA
Related agreements: Click here for the same clause in the 1995 OSLA
Comparison: Template:Gmsladiff Interpretation (Agency Addendum)
Comparison: Template:Osladiff Interpretation (Agency Addendum)

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Content and comparisons

Template:M comp disc GMSLA Interpretation (Agency Addendum)
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Summary

A scholar will note that the most of this interpretation section is surplus to requirements, since it merely fingerpost to other parts of the Addendum. Which leaves the vexed question of (b). This is the definition of Net Loan Exposure. This is designed to capture the overall exposure as between the Borrower and any one Principal in the Agent Lender’s portfolio, across all Loans between those two.
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See also

Template:M sa GMSLA Interpretation (Agency Addendum)
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References