Agency lending via a central counterparty (CCP) such as Eurex Clearing is an attractive means of enhancing yield through strategic lending while minimising credit and systemic risk since the CCP is the legal counterparty to all loans.
Fully integrated securities lending
Clearstream arranges the loans between the borrower and the lender as a neutral agent and distributes them via the SecLend market (offered by Eurex Repo). An experienced distribution team negotiates the best possible rates with the borrowers to ensure attractive lending conditions.
Once the trade has been agreed upon, Clearstream’s Global Liquidity Hub performs all necessary administrative and operational steps including account movements, recalls, returns, rerates, income events, corporate actions and reporting.
Advantages for both lenders and borrowers
While lenders benefit from an increased yield on their securities, the agency lending service gives borrowers the advantage of secure lending at low capital cost. The agency lending service with Eurex Clearing is perfectly suited to large lenders who are looking for secure, regulatory compliant strategic lending solutions. The fully integrated service enables them to make the most of their assets by increasing their yield with no additional operational burden.