(1) For the purposes of Rule 4.14.42, an Authorised Person may treat an Exposure as an eligible liquidity facility provided the following requirements are met:
(a) the liquidity facility documentation must clearly identify and limit the circumstances under which it may be drawn;
(b) draws must be limited to the amount that is likely to be repaid from the liquidation of the underlying Exposures and any seller provided Credit Enhancements;
(c) the facility must not provide credit support by covering for any losses incurred in the underlying pool of Exposures prior to drawdown;
(d) the facility must not be structured to provide regular or permanent funding;
(e) the facility must be subject to an asset quality test to preclude it being used to cover Credit Risk Exposures that are in default;
(f) where the facility is used to fund externally rated Securities the facility can only be used to fund Securities that are externally rated Investment Grade at the time of funding;
(g) the facility cannot be drawn after all Credit Enhancements from which the liquidity facility would benefit have been exhausted; and
(h) repayment of draws of the facility cannot be subordinated to any interests of any note holder in the programme or be subject to deferral or waiver.
(2) Where the Exposure meets the requirements as set out in (1), the following CCF will apply:
(a) 50% to the eligible liquidity facility regardless of maturity; and
(b) 100% if an external rating of the liquidity facility is used for the risk weighting.