Template:Cross default in securities financing agreements: Difference between revisions

Template:Cross default in securities financing agreements (view source)

50 bytes added , 4 June 2019

no edit summary

83,239

edits

@@ Line 5: / Line 5: @@
 ===There’s no need to put one in. Even if you are doing [[term loan|term loans]].===
-All the talk of borrowers and lenders in [[securities financing transaction]]s makes a certain sort of person giddy. But remember: [[SFTR|SFTs]] are ''not'' contracts of indebtedness. {{gmslaprov|Lender}}s aren’t — legally or economically — [[lender|lenders]]. Thus, the omission of [[cross default]] from the standard [[SFT - SFTR Provision|SFT]] agreements ''was not an error''. It was deliberate.
+All the talk of borrowers and lenders in [[Securities financing transaction - SFTR Provision|securities financing transactions]] makes a certain sort of person giddy. But remember: [[SFTR|SFTs]] are ''not'' contracts of indebtedness. {{gmslaprov|Lender}}s aren’t — legally or economically — [[lender|lenders]]. Thus, the omission of [[cross default]] from the standard [[SFT - SFTR Provision|SFT]] agreements ''was not an error''. It was deliberate.
 Now, there is a certain stripe of [[credit officer]] who will not be convinced of this, [[Cassanova’s advice|and will want to put one in anyway]]. Does it do any harm? Well ''yes'', actually: it creates [[contingent liquidity]] issues for your own treasury department, whom credit will routinely ignore when making their credit requests. And yes, from the perspective of production waste in the [[negotiation]] process: insisting on a cross default is, par excellence, the [[waste]] of {{wasteprov|over-processing}}.