Second leg and Second lien: Difference between pages

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''Repurchase agreements''
A lien is a legal right to hold the property of another party or to have it sold or applied in payment of a claim.


A securities repurchase agreement ('repo') involves a pair of trades with the same counterparty in the same security.


The second trade reverses the initial sale and purchase, but at a later date and different price.
A second lien is one issued over the same collateral as a first lien.


The holder of the second lien is subordinated to the first lien.


The second leg is the second trade in the repo.
The second lien holder will only be paid after the first lien holder has been paid, and only if there is any money left over.
 
It is also known as the closing, off, far, or reverse leg.




== See also ==
== See also ==
* [[Far leg]]
* [[Collateral]]
* [[Opening leg]]
* [[Encumbrance]]
* [[Repo rate]]
* [[First lien]]
* [[Repurchase agreement]]
* [[Fixed charge]]
 
* [[Lien]]
 
* [[Mortgage]]
==Other resource==
* [[Pledge]]
*[http://www.treasurers.org/repos  ACT briefing note: Practical steps to investing in Repos ]
* [[Remedy]]
 
* [[Garnishee order]]
[[Category:Financial_products_and_markets]]

Revision as of 12:49, 30 October 2016

A lien is a legal right to hold the property of another party or to have it sold or applied in payment of a claim.


A second lien is one issued over the same collateral as a first lien.

The holder of the second lien is subordinated to the first lien.

The second lien holder will only be paid after the first lien holder has been paid, and only if there is any money left over.


See also