LCH.Clearnet Limited (LCH.Clearnet) is to accept Ginnie Mae Mortgage-Backed Securities (GNMA MBS) as part of its ongoing plans to broaden the range of acceptable initial margin collateral.
The initiative is part of LCH.Clearnet’s recently established Collateral and Liquidity Management (CaLM) service to offer efficient, centralised collateral management services to clients. Accepting high-calibre collateral such as GNMA MBS offers greater flexibility to clients whilst maintaining robust risk management standards. Approximately US$260 billion of GNMA MBS will be eligible to be pledged as initial margin.
Founded in 1968 as an entity designed to help mortgage lenders gain access to capital for mortgage loans, GNMA MBS are among the most secure investments in the global capital market.
“We consider Ginnie Mae mortgage-backed securities among the most secure investments in the global capital market, and we’re pleased to be able to offer clients as much flexibility as possible to meet their margin requirements,” says Andrew Howat, Head of Collateral and Liquidity Management at LCH.Clearnet. “This addition to our range of acceptable collateral reinforces our strategy to maintain the highest standards of risk management, whilst demonstrating our ongoing commitment to developing our business offering, both in the US, and for our buy side clients.”