Senior Credit Officer Opinion Survey, March 2025
A small fraction of dealers reported that haircuts tightened somewhat for both average and most-favored clients in high-grade corporate bonds. A small fraction of dealers reported that maximum amounts of funding and haircuts tightened somewhat for most-favored clients in high-yield corporate bonds. On net, one-fifth of dealers indicated easing of collateral spreads over relevant benchmarks (effective financing rates) for average clients in agency residential mortgage-backed securities (RMBS), as did a small net fraction of dealers for most-favored clients. One-fifth of dealers indicated that collateral spreads eased somewhat for both average and most-favored clients in commercial mortgage-backed securities.
In securities lending, the volume, duration, and persistence of mark and collateral disputes remained basically unchanged over the past three months across all collateral types.
Dealers were asked about their use of contract terms with clients that allow margin offsets between repo and reverse repo positions, and/or cross-margining between repo positions and Treasury futures, other interest rate derivatives, and other products.3 Dealers reported the following:
- Almost all dealers reported having clients that transact with them in both Treasury repo and reverse repo. Of these dealers, nearly two-thirds reported that most, nearly all, or all of their clients are under agreements that allow for margin offsets between these types of positions.
- Over one-half of dealers reported having clients that transact in both Treasury repo and Treasury futures. Of these dealers, only a small fraction reported that most, nearly all, or all of their clients are under agreements that allow for cross-margining of Treasury repo with Treasury futures.
- Nearly two-thirds of dealers reported having clients that transact in both Treasury repo and other interest rate derivatives. Of these dealers, only a small fraction reported that most, nearly all, or all of their clients are under agreements that allow for cross-margining of Treasury repo with other interest rate derivatives.
- More than one-fifth of dealers reported having clients that transact in both Treasury repo and other products. Of these dealers, two-fifths reported that nearly all or all of their clients are under agreements that allow for cross-margining of Treasury repo with other products.
- Nearly all dealers that reported having clients engaging in both Treasury repo and Treasury futures transactions also reported having clients engaging in both Treasury repo and other interest rate derivatives transactions. Overall, nearly two-thirds of dealers reported two types of combinations, more than one-half reported three types, and nearly one-fifth reported all four types.
The full survey is available here.