1. South Street Securities LLC
Repurchase Agreement (Repo) Cash Investment and Securities Finance Liquidity Program
Member FINRA / SIPC
Typical Elements of a Repo Transaction Summary Benefits
Repurchase Agreements, commonly referred to as Repos, are money market transactions in which one party sells (or ‘lends’) securities to another
while agreeing to repurchase those securities at a future date. As such, Repo is essentially a secured loan. •Capital Markets Access.
• All Repo investments are ‘collateralized fully’ with US Treasury, Agency, Mortgage or other securities. • High Quality Counterparty.
• Transactions are governed by a standardized agreement – SIFMA’s ‘Master Repurchase Agreement’. There is also a Global Master Repurchase • Security.
Agreement for international trading. • Principal Protection.
•Repo and Reverse Repo are opposite sides of the same transaction. • Reporting & Transparency.
• Market Competitive Yields.
Repurchase Agreement, or ‘Repo’ Client buys securities with an agreement to resell at a later date. • Yield Advantages.
Could be described as ‘borrowing’ securities and ‘lending’ cash. • Quality Collateralization.
• Back-up Liquidity Lines.
Reverse Repurchase Agreement, or ‘Reverse Repo’ Client sells securities with an agreement to repurchase at a later date. • Tri-party Custody Possible.
Could be described as ‘lending’ securities and ‘borrowing cash’. • Flexibility:
· Line/Draw Amount.
- Haircuts.
Securities Collateral & Securities Collateral & · Term.
Cash Interest Payments South Street Securities Interest Payments
Securities - Collateral Substitutions.
Investor (AA+-rated broker-dealer) Owner • Ease of Execution.
(“buyer”) Cash Invested Cash Borrowed (“seller”) • Standardized Documents:
· Repo Agreement.
· Financial Statements.
· Trading Authorizations.
Key South Street Organizational Elements Eligible Collateral and Market Access · Form W-9/W-8Ben.
All subject to market available liquidity and multiple pricing • Account Opening Process:
• Rated AA+ by S&P. sources: · Complete Documents.
• Fully Registered FINRA (formerly NASD) Broker-Dealer. • US Treasuries. · SSS Internal Review.
• Equity Capitalized with approx $70 Million in Risk-based Capital. • US Agency Obligations/Debt. · Board/Credit Approval.
• $15 Billion in Capacity for Customer and Matched Book Trading. • US Agency Pass-throughs. · Line Approved.
• Diversified Portfolio, in part comprised of: • US Agency CMOs (require additional review). · Trial Trade.
· US Treasury & Agency Repo/Reverse Repo Matched Book. · Issue Line Letter.
· Inter-dealer Collateral Management Portfolio. Cash Repo Investment Demand and Multiple Pricing Sources will · Begin Normal Trading.
· Direct Customer Investment and Securities Financing Franchise. drive Additional Collateral Opportunities.
· Agency Customer Investment and Securities financing Portfolios. --- ---
• Credit Ring-fenced. Repo market liquidity has traditionally only been available to large Additional Information
• Tier I Member of Fixed Income Clearing Corporation ( “FICC”). institutions, through bulge-bracket Wall Street broker-dealers. Alex Frisch
• Bank of New York as Back Office Broker-Dealer Servicer. Chapin Davis Inc./
• Custodial and/or Tri-party Flexibility. ‘Round Lot’ Repo trades are typically $50mm. South Street Securities LLC
• Professional and Experienced Trading, Operations and Ph: (410) 779-1289
Management. South Street Securities allows counterparty access to this market Fx: (410) 779-1301
• Efficient and Proprietary Trading / Trade Processing Systems with trades of $1mm (across as many as 5 CUSIPs) and up. Lines afrisch@chapindavis.com
Platform. are available up to $2 billion. www.sssnyc.com