OCC confirms repurchase facility deal 11 March 2015Boston Reporter: Stephen Durham
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The Options Clearing Corporation (OCC) and eSecLending have collaborated with CalPERS to develop a product to help OCC diversify and increase its committed liquidity resources while offering a risk-adjusted return for CalPERS.
The fully collateralised facility offers OCC a source of access to liquidity while maintaining CalPERS’s conservative risk profile.
It also increases OCC's overall liquidity resources from $2 billion to $3 billion, while diversifying OCC's committed lenders.
“The diversification of OCC's committed lenders to include CalPERS in addition to our existing base of banks and broker-dealers ensures that sufficient capacity is maintained at all times, which is critical to central counterparties like OCC,” said Craig Donohue, OCC executive chairman.
“Expanding our liquidity resource pool to draw on non-bank facilities allows OCC to meet payment obligations to clearing members in a timely way, thus promoting the uninterrupted flow of financial markets.”
Administrative agent for the facility, eSecLending, will support CalPERS with all aspects of the transaction.
“The collateralised facility offers CalPERS an attractive yield within a tightly controlled operating environment and addresses OCC’s desire to establish right way risk in their funding sources,” said Chris Poikonen, executive vice president at eSecLending.
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