AgentLenderPLUS today, is a Peer to Peer execution platform bringing Securities Lenders and Borrowers together. Using AgentLenderPLUS, Owners receive a known spread return from Borrowers while avoiding counterparty risk and reinvestment risk inherent in current securities lending methodologies. AgentLenderPLUS is the only securities lending platform offering a “U.S. Treasury Spread Lock” product, which eliminates these potentially crippling risks.
The AgentLenderPLUS of tomorrow will be the one executable portal every institutional money manager will to turn to, to start their day. If you own U.S. Treasury securities (and you probably do) and are a user of the AgentLenderPLUS platform, you will be eligible to post your mutual funds for all our clients to invest in. Immediately after electronically purchasing a U.S. Treasury security, you will be asked if you would like to lend those securities and earn additional yield by engaging in our securities lending program. AgentLenderPLUS of tomorrow will distribute commercial paper for all our corporate issuers who lend their Treasury holdings through our platform. The AgentLenderPLUS of tomorrow will allow banks to lower their funding costs and distribute new issues on our platform. Money Market Funds who lend their Treasury holdings via our Spread Lock offering, will not only earn the additional yield but will have the opportunity to distribute their funds to all our clients. These are just a few of the expected next steps designed to make AgentLenderPLUS the #1 securities lending portal in the industry.
U.S. Treasury Spread Lock
The AgentLenderPLUS U.S. Treasury Spread Lock allows U.S. Treasury Owners to receive +/- 12 basis points of yield enhancement per annum while eliminating the risks inherent in traditional securities lending. Presently it is available for U.S. Treasury securities maturing under 24 months.
In the AgentLenderPLUS Spread Lock, Treasury Owners execute Identical Offsetting Repurchase Agreements (IORPs) with a Counterparty provided by AgentLenderPLUS using standard SIFMA Master Repurchase Agreements. An Annex signed by both parties accompanies the Master Repo Agreement stating succinct rules by which the Counterparty must abide. The key rule allows the Counterparty unlimited rights of substitution if the maturity date of any Treasury used as a substitution for the original collateral borrowed falls within 16 days of the original bond. Collateral – original or substituted – always remains at the Owner’s Custodian Bank. Owners can liquidate their Repos at any time. These rules protect Owners from interest rate risk, counterparty risk, and liquidity risk.