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Reverse pledge: Difference between revisions
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Amwelladmin (talk | contribs) (Created page with "{{a|pgmsla|}}No, your legal eagles ''haven't'' been in to the cooking sherry again, though at first blush it may certainly sound like it. A reverse pledge is a mightil...") |
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{{a|pgmsla|}}No, your [[legal eagle]]s '' | {{a|pgmsla|}}No, your [[legal eagle]]s ''haven’t'' been in to the cooking sherry again, though at first blush it may certainly sound like it. A [[reverse pledge]] is a mightily counter-intuitive idea but it arises in the context of [[agent lending]] arrangement with certain counterparty types — for example, [[UCITS]] funds — for whom the standard {{pgmsla}} doesn’t work. | ||
Under the normal {{pgmsla}} structure, as we all by now know, the {{pgmslaprov|Borrower}} pledges {{pgmslaprov|Collateral}} to the {{gmslaprov|Lender}} as [[Security interest|security]] for its obligation to return {{pgmslaprov|Equivalent}} {{pgmslaprov|Loaned Securities}} at the end of the {{pgmslaprov|Loan}}. This means the {{pgmslaprov|Lender}} is a [[secured creditor]] of the {{pgmslaprov|Borrower}}: it has [[credit exposure]] to the tune of the Loaned Securities, but secured on the collateral. | Under the normal {{pgmsla}} structure, as we all by now know, the {{pgmslaprov|Borrower}} pledges {{pgmslaprov|Collateral}} to the {{gmslaprov|Lender}} as [[Security interest|security]] for its obligation to return {{pgmslaprov|Equivalent}} {{pgmslaprov|Loaned Securities}} at the end of the {{pgmslaprov|Loan}}. This means the {{pgmslaprov|Lender}} is a [[secured creditor]] of the {{pgmslaprov|Borrower}}: it has [[credit exposure]] to the tune of the Loaned Securities, but secured on the collateral. | ||