An extension of credit which is collateralized by debt or equity securities that are liquid and highly marketable. The collateral is revaluated on a daily basis (i.e., marked to market) and the transaction is subject to daily margin maintenance requirements. Typically, the loan is offered under an agreement that grants the lender the irrevocable right to accelerate and terminate the extension of credit and to liquidate or set off collateral immediately upon an event of default (the same applies in the event of bankruptcy, insolvency, or similar proceeding) of the borrower.
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