break-out session euroclear collateral conference management/triparty... · triparty for corporates...
TRANSCRIPT
![Page 1: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/1.jpg)
Triparty for corporatesBreak-out session Euroclear Collateral Conference
Tuesday, 13 May 2014
![Page 2: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/2.jpg)
The repo market is the ideal meeting place for lenders and borrowers looking for secured term investments
2
Moving from unsecured to secured investmentIntroducing Repo
Post-crisis, a treasurer’s three objectives:
• Investing in line with term liabilities
• Securing his investment
• Obtaining a reasonable return
![Page 3: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/3.jpg)
Securities
Cash3
Collateral provider Cash provider
Moving from unsecured to secured investmentPrinciples of Repo
Securities
€ 200m
CashOpening
Collateral provider Cash provider€ 200m + interest
Closing
![Page 4: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/4.jpg)
4
Moving from unsecured to secured investmentRepo – what value does it bring ?
Post crisis3-month liability invested in a 1-week asset
Libor: the unsecured curve
opportunity gain
Spread between unsecured & secured curve
You can invest longer term in
a secured way!!
![Page 5: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/5.jpg)
5
Moving from unsecured to secured investmentHigher returns for secured financing
EUR rate for Investment grade collateral (BBB and above)
unsecured Euribor rate
average rates Euroclear Bank triparty repo
![Page 6: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/6.jpg)
6
Triparty collateral managementBenefits for the Corporate
• The benefits of Repo
• Minimal operational effort through a triparty agent► Complete outsourcing of collateral management tasks► No fees for cash providers
The best of both worlds
![Page 7: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/7.jpg)
Euroclear
7
Securities
Cash
• Transfer of eligible securities against cash in a secured way
• Valuation of securities on daily basis to make sure always equal to 200m cash
• Margin calls and releases according to valuation
Triparty Collateral managementThe repo outsourcing solution
€ 200m
During the lifecycle of a repo
Collateral provider Cash provider
![Page 8: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/8.jpg)
8
Triparty Collateral managementThe repo outsourcing solution
Automatic processes
Integrated systems protect youagainst settlement and custody risk
• Matching of trade details
• Selection according to eligibility
• Transfer of securities
• Daily mark-to-market
• Margin calls and releases
• Asset servicing of collateralDedicated support
Operational teams guide you in your day-to-day operational needs
![Page 9: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/9.jpg)
•Euroclear has a light footprint:
►Instructions can be sent via Bloomberg, Fax or Swift Lite
►Web-based and e-mail reporting of collateral received, at flexible frequencies
9
Triparty Collateral managementCommunication means
![Page 10: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/10.jpg)
10
Triparty Collateral managementEntering the repo market
Cash Borrower
Corporatetreasurer
Repurchase ServiceAgreement
Bilateral repo agreemente.g. GMRA
Enables trading repo
Outsources collateral management to Euroclear Bank
![Page 11: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/11.jpg)
Repo is still a challenge for many treasurers
Triparty Collateral managementAdmission and legal effort
•Euroclear Bank has simplified its admission and registration process to ensure smooth onboarding
•But negotiating and signing a bilateral GMRAs remains a time-consuming and costly exercise…
11
![Page 12: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/12.jpg)
Introducing RepoAccessA new service for Corporates
•Euroclear’s answer to the challenge posed by the GMRA is RepoAccess, a free service available to Collateral Takers
•Through RepoAccess, Euroclear Bank leverages its existing GMRAs with all major Collateral Givers to set-up new relationships between the Giver and RepoAccess clients
12
![Page 13: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/13.jpg)
13
• Euroclear will establish a new GMRA, based on its existing GMRA, in the treasurer’s name
• A treasurer can have the benefits of repo while being shielded from negotiating a GMRA
Euroclear Bank RepoAccessPrinciples
Euroclear obtains a mandate to set-up a GMRA
![Page 14: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/14.jpg)
Euroclear Bank RepoAccessLegal framework
Cash Borrower
Corporatetreasurer
Repurchase ServiceAgreement
Bilateral repo agreement(GMRA)
Agency agreement
The Agency agreement enables Euroclear to handle the set-up of the GMRA
14
![Page 15: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/15.jpg)
With RepoAccess, have
• The benefits of industry-standard agreements (vs proprietary alternatives)
• Flexibility over post-trade settlement (bilateral, other triparty agents)
• Full control of the collateral profile and of trade execution
15
Euroclear Bank RepoAccessAdvantages
![Page 16: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/16.jpg)
16
Interested in joining the Collateral Highway?
Contact your relationship manager or one of our specialists
Olivier de [email protected]+32 (0)2 326 2884
Simon [email protected]+32 (0)2 326 1626
Triparty Collateral ManagementGetting started
![Page 17: Break-out session Euroclear Collateral Conference Management/Triparty... · Triparty for corporates Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014](https://reader034.vdocuments.site/reader034/viewer/2022051720/5a78d4227f8b9a07028ee35f/html5/thumbnails/17.jpg)