Triparty for corporatesBreak-out session Euroclear Collateral Conference

Tuesday, 13 May 2014

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

Securities

Cash3

Collateral provider Cash provider

Moving from unsecured to secured investmentPrinciples of Repo

Securities

€ 200m

CashOpening

Collateral provider Cash provider€ 200m + interest

Closing

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!!

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

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

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

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

•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

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

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

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

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

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

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

16

Interested in joining the Collateral Highway?

Contact your relationship manager or one of our specialists

Olivier de SchaetzenOlivier.deschaetzen@euroclear.com+32 (0)2 326 2884

Simon MeesSimon.mees@euroclear.com+32 (0)2 326 1626

Triparty Collateral ManagementGetting started