State Street has launched a new peer-to-peer repo program for the buy-side. The service aims to deliver competitive financing costs across a broader range of collateral types, as well as yield enhancement opportunities compared to traditional repo markets. State Street guarantees the payment obligations of cash borrowers to cash lenders within the program in the event of a default, facilitating bilateral trading by counterparties with varying credit and capital strength.
The program is available to a broad range of client types, including non-financial corporates, asset owners, pension plans, regulated funds, insurance firms, and hedge funds, whether or not they are current State Street custody clients. Program participants trade with one another under a common master repurchase agreement, negotiating trade terms with approved counterparties within the program’s broader requirements guidelines.