Pension lawyers rewrite contracts to prevent another sell-off of gilts
Lawyers are “rapidly redrafting” certain pension contracts so they can use assets other than cash as collateral, to prevent another huge sell-off in UK government bonds.
The move comes after pension funds were forced to dump gilts to raise cash to cover their market exposure following former chancellor Kwasi Kwarteng’s “mini” Budget.
One senior lawyer said he was amending “credit support documentation” so that pensions can post other “liquid” assets, such as government bonds, when they have to provide collateral to hedge their positions in the market.
This story originally appeared on: Financial Times - Author:Emma Dunkley
