PBGC Looking for Securities Lending Partners

December 9, 2008 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) has issued a Request for Information (RFI) to assess the viability of expanding its securities lending program to qualified sources in the commercial and public sector market.

The agency said it issued the RFI “to determine if additional competing of the securities lending business will benefit the PBGC.” The agency said it is seeking qualified companies that can enhance its current activities and gain a better understanding of costs and benefits associated with modifying and potentially expanding the provider base of the program.

The information may also form the basis of a PBGC review and refinement of its securities lending program, the RFI said.

The PBGC said it participates in a securities lending program administered by its custodian bank whereby the custodian bank lends PBGC’s securities to third parties. The custodian bank requires collateral from the borrower that equals 102% to 105% of the securities lent, and the collateral is held by the custodian bank.

In addition, the RFI says some of PBGC’s investment managers are authorized to invest in repurchase agreements and reverse repurchase agreements. The manager either receives cash collateral or pays cash out to be used as collateral, and any cash collateral received is invested.

The RFI can be found on the Federal Business Opportunities Web site  here . Responses must be received by 10:00 a.m. EST on December 22.