Euroclear Bank has processed the first ever cross-border triparty repo transaction using Korean government debt as collateral for DekaBank and Morgan Stanley.
The mandate emphasizes the timeliness of Euroclear Bank's link with Korea Securities Depository (KSD), launched in September 2009. The arrangement enables market participants to settle cross-border transactions involving Korean government bonds and hold them in custody with Euroclear Bank to use as collateral to support a range of financing deals.
Asian and European clients are actively using Euroclear Bank's triparty services to settle repos and other financing transactions using international and domestic securities from more than 40 markets, including 10 in the Asia-Pacific region. For example, Euroclear Bank clients have increased their use of Japanese government bonds (JGBs) as collateral for financing purposes since services for JGBs became available at Euroclear Bank in March 2007.
Frédéric Hannequart, Chairman of Euroclear Bank, said: "There is a growing interest in Euroclear Bank's transcontinental financing capabilities as a triparty agent. We are assisting more and more European firms to finance repos involving European and major Asia-Pacific currencies, with local Asian counterparties and securities as collateral. We are delighted to open the Korean market to these opportunities. Given our long-standing operational expertise in collateral management, we are equally committed to serving the Asia-Pacific region's interests internationally."
Grant Saunders, Head of Equity Financing & Tri Party Financing at DekaBank, stated: "Euroclear Bank's triparty collateral management services complement our ability to secure exposures with multiple counterparties worldwide. As commercially sourced liquidity can be hard to attain in certain markets, we welcome Euroclear Bank's efforts to deepen securities collateral pools by making more types of securities, such as Korean government bonds, available for financing purposes."