Asymmetric Eligible Collateral Terms in Bilateral CSAs

Summary

This question asks whether a bilateral credit support annex can define different eligible collateral for each counterparty. Its example has one party posting US dollars or Treasury securities and the other posting euros or German government bonds. It also notes that such terms could complicate valuation.

The document is framed as an inquiry about contractual possibility and market practice; it supplies no answer, examples of executed agreements, or valuation method. The core topic is collateral eligibility asymmetry in bilateral derivatives arrangements, rather than a developed pricing or credit-risk analysis. Any practical assessment would depend on the CSA wording and the collateral, currency, and valuation terms agreed by the parties.

Key ideas

• The question concerns whether counterparties can have different eligible collateral sets under one bilateral CSA.
• Its example pairs dollar cash and Treasury securities for one party with euro cash and Bunds for the other.
• Different collateral terms may complicate valuation, but the document gives no valuation analysis.
• No evidence or answer is supplied about whether this arrangement occurs in practice.

Tags

# Possible to have different collateral for each party?


# Possible to have different collateral for each party?












Normally bilateral credit support annexes would have both parties post/receive the same collateral be it US treasuries or cash etc. Are there CSAs Where each party has a different set of eligible collateral? IE party A can post USD cash and treasuries but party B can post EUR cash and Bunds? From a valuation perspective it would be a headache but does this arrangement exist? Would it be possible to have such an agreement?

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