Trade on the 360T trading platform between easyJet and Commerzbank settles successfully via Clearstream / Cash borrowers benefit from proven access to corporate cash providers such as easyJet for triparty trades / Increased focus on offering for non-financials
Clearstream: JOINT MEDIA RELEASE OF CLEARSTREAM, 360T AND COMMERZBANK
On 17 October, a first triparty trade between easyJet as cash giver and Commerzbank as cash taker was conducted on the trading platform of 360 Treasury Systems AG and settled via Clearstream, thus effectively validating the partnership announced earlier in the year. This was the first triparty trade on 360T, making easyJet and Commerzbank the first counterparties to benefit from Clearstream’s collateral management services via 360T.
The Clearstream and 360T partnership enables 360T clients such as corporates, hedge funds and asset managers to benefit from Clearstream’s award-winning collateral management services as part of the Global Liquidity Hub offering. With the 360T trading platform as “front end” and Clearstream as settlement engine and as collateral management provider to securitise the transactions, the cooperation allows the matching of trading partners for triparty repo agreements, extending the Clearstream service to non-financials.
Philip Stewart, Assistant Treasurer, easyJet, said: “easyJet adopts a prudent investment policy, with security of cash the number one priority. This, in addition to the ability to increase tenor and maximise return on our core cash, was a key factor when exploring alternatives to time deposits and money market funds. We took the decision to begin utilising triparty repo due to the liquidity of the repo market and the fact that collateralised deposits are more secure, while also benefiting from the higher yields on offer for longer dated deposit terms. We selected Clearstream due to their customer focused approach and desire to provide a service specifically tailored to corporates. The Clearstream Repurchase Conditions offering and recent tie in with 360T were key differentiators.”
Carlo Kölzer, 360T CEO and Founder, commented: “We are pleased and proud that the first triparty trade has been successfully executed over the 360T platform. It opens a new area of trading in cash management and we expect this to become a market standard pretty soon. Collateral management is gaining in importance in the market and with Clearstream as a partner we can offer our clients a proven concept. Furthermore, the case shows that when “Best of Breed” service providers work together, they are able to create highly valuable value chains for the customer as proven by Commerzbank, Clearstream and 360T in this case.”
Stefan Lepp, Head of Global Securities Financing and Member of the Executive Board of Clearstream, said: “Over the past months, together with partners like Commerzbank and 360T, we have built a unique value proposition for corporate clients, a customer group which is increasingly looking for safe and efficient alternatives in the money market. We are delighted that we could attract a renowned institution like easyJet through this cooperation. Together with our partners, we will continue to expand our B2C service offering.”
Nikolaus Giesbert, Divisional Board Member for Fixed Income & Currencies at Commerzbank Corporates & Markets, commented: “We have a strong history of cooperating with Clearstream for corporate clients, for example via our joint offering under our TradeCycle partnership. The first triparty repo trade on 360T with easyJet is yet another example of how we collaborate to offer corporate clients the best of both worlds.”
The partnership between Clearstream and 360T is part of a series of recent developments designed to facilitate easy and streamlined access to triparty repo. Earlier this year, Clearstream developed a new legal master agreement for triparty repo transactions (Clearstream Repurchase Conditions, CRC in short) to enable market participants to sign just one contract for multiple counterparties and speed up counterparty “marriage broking”.
The CRC is proving to be of particular interest to new players in the repo market such as corporates who are currently deterred by the existing lengthy contract negotiation process. The CRC is expected to appeal to corporates entering into reverse repos to secure their financing and then, optionally, re-use the collateral they receive to cover OTC derivative margin requirements with clearing members or central counterparties (CCPs).
Clearstream’s Global Liquidity Hub encompasses a collateral pool with EUR 575.2 billion (September 2013) outstanding (weekly average) and a network of more than 500 active counterparties. Its services are divided into dedicated streams: Liquidity Hub GO (Global Outsourcing), an outsourced collateral management service that supports domestic market infrastructures; Liquidity Hub Connect, a collateral management service for custodian banks; Liquidity Hub Collect with a number of trading venues and electronic platforms; and Liquidity Hub Select for buyside customers.
