🔐Loan Collateral

Learn more about the collateral used for Fixed Term Vaults.

Loan Collateral

Every Loan made via the Treasury Management & YieldProduct is fully collateralised by eligible loan collateral.

At all stages of the transaction, loans are fully collateralised at 100% LTV. At no point are loans under or uncollateralized. The Borrower is legally restricted to use loan proceeds solely to acquire the applicable collateral and to have acquired the collateral before or on the Loan Commencement Date.

Eligible Loan Collateral by Vault Type

	Eligible Loan Collateral
Fixed Term US Treasury Bill Vaults	USD, USDC, US Treasury Bills
Flexbile Term USDC Vault	USD, USDC, US Treasury Bills, Money Market Funds (Fidelity Institutional Liquidity Funds & Wilmington Trust)
Flexible Term EURC Vault	EUR, EURC, French, German, Italian 1 Month Bonds, Money Market Funds (Fidelity Institutional Liquidity Fund).

Purchase and Sale of Collateral

OpenTrade SPC, as advised by the Investment Advisor (Five Sigma Finance Ltd), engages in trading activity including the purchase and sale of loan collateral to ensure all loans are fully backed with eligible collateral and that withdrawal requests are processed according to the Lender's instructions.

The purchase and sale of loan collateral is done through a network of regulated financial institutions and broker/dealers based in the United Kingdom and Switzerland. OpenTrade SPC pays a fee to the financial institutions and broker/dealers based on the amount of collateral purchased and sold through them.

Custody of Collateral

All collateral is held in segregated accounts in the name of OpenTrade SPC, Treasury Management Segregated Portfolio 1 at regulated custodians in the United Kingdom and Switzerland. OpenTrade SPC pays a fee to these regulated custodians based on the value of the collateral held with them.

Lender's Security Interest over Collateral

The Borrower has granted a valid and fully perfected security interest in the accounts in which the collateral will be held pursuant to the Security Trust Deed.

The Security Trust Deed is a legal agreement that arranges for a Security Trustee to hold a master security interest in the collateral held in the Borrower's accounts on behalf of the Lenders.

In a default event, each Lender can enforce their individual right to the collateral securing their loans through the Security Trustee and instruct the Security Trustee to either liquidate the collateral or hold the collateral to maturity. The proceeds of either would be then used to repay lenders for loans in default.