What happens when the issuer of a bond being used as collateral in a classic repo fails to pay a coupon on the bond during the term of the repo?

Question

Options

• AThe transaction is terminated and the collateral is returned to the seller
• BThe transaction is rolled over until the coupon is paid or the issuer becomes insolvent, at which point
• CThe buyer is obliged to make a manufactured payment to the seller and becomes an unsecured creditor
• DThe buyer is not obliged to make a manufactured payment to the seller but the buyer is likely to ask

• A
  2% (1)
• B
  5% (3)
• C
  10% (6)
• D
  83% (49)

No community discussion yet for this question.