The Liquidity and Sustainability Facility (LSF) announced that Euroclear Bank’s Admissions Committee has approved its application for direct membership, marking a significant milestone in the LSF’s mission to enhance liquidity in African sovereign bond markets.
In addition, the LSF has defined for Euroclear a standardized Africa General Collateral Triparty repo basket featuring 176 African Sovereign and Corporate International bonds. It is designed to centralize liquidity within this asset class and enables investors to execute triparty repo transactions on this basket, which can be tailored to their requirements, in a high-quality and liquid environment.
As a direct member, the LSF gains immediate access to Euroclear’s extensive global network of over 2,000 financial institutions and benefits from Euroclear’s global expertise as triparty agent for collateral management for large institutional repo transactions. The triparty set up enhances liquidity management through optimization of collateral assets, while providing robust risk mitigation through independent valuation, automated margin calls, and comprehensive settlement services.
Bernard Ferran, chief commercial officer at Euroclear, said in a statement: “As a leading international central securities depository in the Eurobond market, this strategic alliance with LSF is a natural fit.”
“With this membership, the LSF secures direct access to one of the world’s premier post trade services providers and ICSD” said David Escoffier, CEO of the LSF Secretariat, in a statement.”Euroclear stands as a key player in African Sovereign Eurobonds repo transactions, which is precisely the LSF’s focus. The standardized processes and connectivity options Euroclear offers provide us with a significant competitive advantage in today’s interconnected global financial markets.”
As a financial market infrastructure, Euroclear is one of the largest providers of triparty repo services globally, enabling financial institutions to engage in secured lending and borrowing arrangements with confidence. It owns and manages the Euroclear LSFGC Africa standardized basket.