Times Square, New York

COMMON STOCK & BOND FINANCING, USD 5MM to $100MM+ (US OTC $1MM+)

Lending Area: Worldwide (excluding the continent of Africa but South Africa is ok)

(including China, Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Thailand, Vietnam), +

NO UPFRONT FEES

Is your firm a listed public stock company or are you a common stock or bond investor and need access to inexpensive and secure financing? Securities-based financing is a low cost option to consider for any reason. The benefit of getting a common stock loan with us versus your stock broker is that your stock loan is non-recourse, which means that you never receive a margin call when your stock decreases in value.


Hong Kong Stock Exchange

SECURITIES-BASED LOANS

Common stock & bond financing are securities-based loans where the terms of the loan are governed by a "Securities Lending Agreement," also know as the Control Agreement, which requires that the borrower provide the lender with collateral, in the form of common stock, bonds, or other securities, of value equal to or greater than the loaned securities plus an agreed upon margin, and the common stock is pledged as collateral for the stock loan. We also do Block Trades and Repurchase Agreements (REPOs).


RETENTION OF OWNERSHIP

In most countries, borrower retains ownership of the common stock that is held in borrower's own brokerage account, so borrower continues to enjoy dividends and capital appreciation of the stock during the term of the stock loan. In countries that implement strict capital controls* against their citizens and businesses, title of the stock may need to be transferred to the lender during the term of the loan; title to the shares is vested back to borrower upon repayment of the loan.


Shenzhen Stock Exchange

REPAYMENT OPTIONS

1) regain control of your common stock by paying the loan in full including accrued interest, if any, or

2) if the value of the pledged common stock has 'fallen below' the amount you owe (including interest), you can simply walk away from the stock loan and only forfeit your common stock. The lender has no other recourse against you, and cannot attempt to recover any of the loan amount or interest from you; your credit rating is not affected.


Luxembourg Stock Exchange

COMMON STOCK LOAN OVERVIEW

- Approvals: same day or within 24 hours.

- Arranger Fee: 4 pts to 6 pts, paid at closing from loan proceeds.

- Collateral: public exchange traded stock, freely traded, and unrestricted.

- Interest Rate: range from 3% to 10%

(depending on the stock liquidity, risk, and the currency of the stock loan).

- Lenders: investment groups, high net worth individuals, & endowments.

- Loan-to-Value (LTV): 40%-75%.

- Loan Amount: from USD $5 million to $100 million plus (OTC $1MM+)

- Lock-In Period: 12 to 36 months (varies by lender).

- Maturity Date / Loan Term: 2 to 4 years (varies by lender).

- Non-Recourse: the common stock is the only collateral for the loan.

- Payments: interest only (usually quarterly).

- Processing Time: stock loan closes in 5-7 trading days depending on

the speed at which the borrower processes the paperwork.

- Repayment Term: 2-4 years.


Hong Kong Stock Exchange

FOR LOAN APPROVAL (24 Hours or less)

Please Provide: (email here) - STOCK LOAN PROCESS

1) stock company/symbol (i.e. ticker or #):

2) country/exchange traded on:

3) loan amount (or # shares available):

4) broker account statement confirming shares

5) shareholder name and address for term sheet




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USING BONDS TO RAISE CAPITAL (request quote)

1) financing available using existing bonds (public or private) as collateral, or
2) lender will create a bond using other collateral, and provide the financing, which will necessitate charging the borrower upfront for the attorney to prepare the bond documents and structure the SPV**. The fee varies from USD 25,000 and depends on complexity

 
** A special purpose vehicle/entity (SPV/SPE) is a subsidiary company with an asset/liability structure and legal status that makes its obligations secure even if the parent company goes bankrupt.

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NO TITLE TRANSFER - NO LOAN LIMIT

NO MARGIN CALLS

Lending Area: Most Countries


UPDATE: 2018-05-27

INDIA, due to increased capital controls implemented by the Royal Bank of India (RBI), these loans can still be done as bond loans (i.e. bond backed by India common stock). Similar terms as below except interest rate is 4%, annual bond fee is 2%, and there is a one-time upfront legal fee of USD 25,000 to create the bond and setup the SPV. See also above "Using Bonds to Create Capital."

CHINA & HONG KONG, see the next loan program below.


This loan program is especially valuable to citizens and businesses of countries with strict capital controls* (i.e. ongoing, recent, or their government is considering the implementation of capital controls.), like: Argentina, Brazil, Cambodia, Chile, Cyprus, Germany, Iceland, India, Indonesia, Ireland, Japan, Malaysia, Romania, Russia, South Korea, Spain, Taiwan, Thailand, Turkey, Venezuela, Vietnam, ...


40% LTV - single payment; unlimited loan amount

- Interest Only: 5%/year (paid quarterly, in advance)

- Loan-to-Value (LTV): 40%

- Loan Currency: USD (other currencies considered)

- Term: 3 years (option to extend for an additional year)

- Quick (DVP trade).

- Borrower can have loan proceeds available worldwide



Loan Submission Requirements:

1) stock company/symbol (i.e. ticker or #)

2) country/exchange traded on:

3) loan amount (or # shares available)

4) broker account statement confirming shares

5) shareholder name and address for term sheet

and email here


SAME DAY, lender will provide a term sheet for borrower approval.

When signed term sheet is returned, lender needs:

6) SSI (Standard Settlement Instructions) and contact info for borrower's broker dealer,

7) if shareholder is an individual, passport of the shareholder,

OR if shareholder is an entity, passport of the CEO, etc, and certificate of formation.

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CHINA & HONG KONG

NO TITLE TRANSFER - 30% to 75% LTV

- Collateral: shares held in borrower's account in HK

- Interest Only: 5% to 13.5%/year (paid quarterly)

- Loan-to-Value (LTV): 30% to 60%

- Tranches: 2 or 3, usually three trading days apart

- Loan Currency: USD (other currencies considered)

- Term: 3 years

- Quick (DVP trade).

- Borrower can have loan proceeds available worldwide.


Loan Submission Requirements:

1) stock company/symbol (i.e. ticker or #)

2) country/exchange traded on: 

3) loan amount (or # shares available)

4) broker account statement confirming shares

5) shareholder name and address for term sheet

and email here

SAME DAY, lender will provide a term sheet for borrower approval. When signed term sheet is returned, lender needs:

6) Contact information for shareholder's broker dealer,

7) if shareholder is an individual, passport of the shareholder,

OR if shareholder is an entity, passport of the CEO, etc, and certificate of formation.

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* CAPITAL CONTROLS

(i.e. especially exchange controls and limits on outflows from portfolio investments)

Gochoco-Bautista, Jongwanich, and Lee (2010, p. 16-17) say "The findings imply that capital outflows actually increase when countries impose restrictions to try and prevent capital outflows" and when "a country restricts capital outflows, it is sending a signal to market participants that it is worried about loss of confidence and the possibility of capital flight and financial instability, and may signal difficulties in repatriating profits, any of which could precipitate capital outflows." When a country implements capital controls, the policies put into place are determined through the analysis of benefits and costs (i.e. benefits to the government not the citizens and businesses, and costs are ultimately paid by the taxpayer) (Country Policies, 2000, p. 41).


AFFECT ON CITIZENS/BUSINESSES & SOLUTIONS

Capital controls result in citizens losing control of their wealth in favor of their government, and losing the freedom to enjoy their wealth as they wish. To maintain control of wealth and earnings, citizens and businesses of these countries must move their capital abroad, start earning abroad, and not bring the funds back into the restricting country. Suggested countries to hold assets are Hong Kong, Singapore, and Switzerland. For other solutions, see  Freedom.


References:

Gochoco-Bautista, Maria Socorro; Jongwanich, Juthathip; Lee, Jong-Wha (October 2010). How Effective are Capital Controls in Asia? ADB Economics Working Paper Series, No 224. Retrieved from https://www.adb.org/sites/default/files/publication/28426/economics-wp224.pdf


“Country Experiences with Their Use and Liberalization IMF Occasional Paper 190.” International Monetary Fund (IMF), 17 May 2000, Retrieved from

http://www.imf.org/external/pubs/ft/op/op190/pdf/part1.pdf