State Street Introduces New Peer-to-Peer Repo Financing Marketplace for the Buy-Side

Rhea-AI Summary

State Street Corporation (NYSE: STT) has launched a new Peer-to-Peer Repo program aimed at the buy-side market, enhancing financing costs and yield opportunities across various collateral types. This program guarantees payment obligations for cash borrowers, promoting safer bilateral trading. Designed in collaboration with clients, it engages diverse participants like pension plans and hedge funds, aligning with evolving market needs. State Street intends to broaden the program's capabilities with increased asset and collateral flexibility, solidifying its status as a leader in financial services for institutions.

Positive

• Launch of Peer-to-Peer Repo program enhances financing costs and yield opportunities.
• State Street guarantees payment obligations, increasing security for cash lenders.
• Program designed in collaboration with clients, catering to market needs.
• Expands capabilities with plans for new currencies and assets.

Negative

• None.

State Street Corporation (NYSE:STT) today announced the release of a new Peer-to-Peer Repo program for the buy-side. Building from its market-leading position in sponsored repo and securities lending, including peer-to-peer opportunities within its agency lending program, Peer-to-Peer Repo enables competitive financing costs across a broader range of collateral types and yield enhancement opportunities compared to traditional repo markets. State Street guarantees the payment obligations of cash borrowers to cash lenders within the program following a default, thus facilitating bilateral trading by counterparties with varying credit and capital strength.

“We are very pleased to be launching our Peer-to-Peer repo marketplace that will enable the buy-side seeking market liquidity to extract incremental value by accessing this new platform,” said Nadine Chakar, head of State Street Global Markets. “State Street has a history of creating innovative solutions tailored to the buy-side market, most recently a peer-to-peer securities lending product, and the launch of this new Peer-to-Peer repo platform further demonstrates our market expertise in fundamental financing & collateral solutions. This platform, designed in close collaboration with buyside clients, further complements our broader investments in sponsored repo and collateral management. We are excited to be at the forefront of an evolving and exciting journey for the industry.”

This offering is available to a broad range of client types including non-financial corporates, asset owners, pension plans, regulated funds, insurance firms, and hedge funds, today, whether or not current State Street custody clients. Program participants trade with one another pursuant to a common master repurchase agreement, negotiating trade terms with approved counterparties within the program’s broader requirements guidelines.

“We are pleased to continue building our buy-side securities financing tool-kit, delivering new solutions to meet evolving client needs,” said Travis Keltner, managing director, State Street Global Markets Funding and Collateral Transformation. “We look forward to growing this program with new currencies, assets and collateral flexibility for our global client base. We have valued collaborating with clients and partners and plan to strategically position the program with extended front-to-back capabilities, including collateral management. Ultimately, we look to align this market infrastructure as part of the evolving digital landscape.”

Click here for more information on State Street’s Peer-to-Peer Repo capabilities.

About State Street

State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $38.8 trillion in assets under custody and/or administration and $3.5 trillion* in assets under management as of December 31, 2020, State Street operates globally in more than 100 geographic markets and employs approximately 39,000 worldwide. For more information, visit State Street's website at www.statestreet.com.

*Assets under management as of December 31, 2020 includes approximately $75 billion of assets with respect to SPDR® products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated.

© 2021 State Street Corporation - All Rights Reserved

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FAQ

What is State Street's new Peer-to-Peer Repo program?

State Street's Peer-to-Peer Repo program is designed for the buy-side market, offering competitive financing and yield opportunities across various collateral types.

How does the Peer-to-Peer Repo program benefit cash lenders?

The program guarantees payment obligations, enhancing security for cash lenders when borrowers default.

Who can participate in the Peer-to-Peer Repo program by State Street?

Participants include non-financial corporates, pension plans, asset owners, insurance firms, and hedge funds, whether or not they are current State Street custody clients.

What is the aim of State Street's Peer-to-Peer Repo program?

The program aims to enhance market liquidity for the buy-side, allowing clients to extract incremental value through a new trading platform.

When was the Peer-to-Peer Repo program announced by State Street?

The Peer-to-Peer Repo program was announced on March 3, 2021.