DEBT DERIVATIVES POLICY
Exhibit A - Acceptable Collateral
Issued By: USNH Assoc. Vice Chancellor for Finance
Issued Date: 01/01/06
Exhibit A - Acceptable Collateral |
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| (A) Cash | |
| (B) (x) Negotiable debt obligations issued by the U.S. Treasury Department or the Government National Mortgage Association (“Ginnie Mae”), or (y) mortgage backed securities issued by Ginnie Mae (but with respect to either (x) or (y) excluding interest only or principal only stripped securities, securities representing residual interests in mortgage pools, or securities that are not listed on a national securities exchange or regularly quoted in a national quotation service) and in each case having a remaining maturity of: | |
(i) less than one year |
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(ii) greater than one year |
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| (C) (x) Negotiable debt obligations issued by the Federal Home Loan Mortgage Corporation (“Freddie Mac”) or the Federal Home Loan Mortgage Association (“Fannie Mae”) or (y) mortgage backed securities issued by Freddie Mac or Fannie Mae but excluding interest only or principal only stripped securities, securities representing residual interests in mortgage pools, or securities that are not listed on a national securities exchange or regularly quoted in a national quotation service. | |
| (D) Any other collateral acceptable to the USNH in it sole discretion. | The valuation percentage shall be determined by the Valuation Agent from time to time and in its reasonable discretion. |
For example, if a counterparty is required to post $1.0 million of collateral and wished to use Ginnie Mae’s with five years remaining to maturity, it would be required to post $1,020,408 ($1.0 million/0.98) to satisfy the collateral requirement.