Securities Lending Agreement

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Securities Lending Agreement

An agreement governing the loan of a stock, derivative, or other security to an investor. A securities lending agreement requires the borrower to put up collateral, such as cash, security, or a letter of credit. It also states how long the loan lasts, what fee the lender receives, and the amount and type of collateral. Securities lending agreements are important to short selling, in which an investor borrows securities in order to immediately sell them.
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Also discussed are the implications of the treatment of repurchase and securities lending agreements.
Complicating matters is the fact that borrowers of securities under repo or securities lending agreements have the right to resell the securities.
Another area being studied is the reduction of reporting errors associated with repurchase and securities lending agreements.
As of September 30, 2008, ACE has entered into securities lending agreements approximating $2 billion.
These counterparties have agreed to both a contractual reduction of margin requirements for financing the company's mortgage securities and a suspension of their rights to invoke further margin calls and related rights under their reverse repurchase agreements, global master securities lending agreements and auction swap agreements subject to certain covenants and conditions discussed in the company's March 19, 2008, press release announcing the agreement.
8 billion of reverse repurchase agreement financing whereby these counterparties have agreed to both a contractual reduction of margin requirements for financing the company's mortgage securities and a suspension of their rights to invoke further margin calls and related rights under their reverse repurchase agreements, global master securities lending agreements and auction swap agreements with the company subject to certain covenants and conditions discussed below.
Her work is principally focused on representation of hedge fund, broker-dealer and bank clients with respect to the development and negotiation of specialized financing arrangements, derivatives and other financial products, including prime brokerage and securities lending agreements, various option, swap, repurchase and forward arrangements, and a wide variety of equity, credit and hedge fund-linked structures.

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