Fully-collateralized vs non-collateralised Call Warrants
- A Call Warrant issue is “fully-collateralised” if the issuer deposits the relevant amount of underlying securities with an independent trustee in order to secure the obligations of the issuer and adequately protect the interests of the warrant holders.
- A Call Warrant issue is “non-collateralised” if the issuer provides for its obligations in a form other than by way of charge over the underlying securities. The issuer usually adopts dynamic hedging strategies to provide for its obligations under the warrants.
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