Securities-Backed Financing

Stock loans, Repo transactions, and block trades provide immediate liquidity solutions

When equity is tied up in publicly traded securities, you have few options apart from selling the securities to generate liquidity. Large single or multi-issuer shareholders generally cannot sell their securities in bulk, leaving them with few options for on-demand liquidity.

Securities-backed financing offers a family of products and services and allow such clients immediate access to liquidity up to 70% of the value of securities, in a s little as 14 days. Other features of these products include:

Locked-in cash value to offset market volatility
No restrictions on use of cash proceeds
Loans and transactions are not dependent on personal credit and require no personal guarantees
Securities can be non-marginable and can include stock from recent IPOs and stock that routinely trades for less than US$5.00 per share.
Borrowers can elect to not repay the principal and simply walk away from the loan by forfeiting the collateral.

Stock Loan Features

Securities-backed financing offers options of fixed interest, securities collateralized loans to accredited investors in certain geographic territories with the following minimum features:

The borrower must be seeking a loan in a minimum amount of US$1,000,000, maximum is uncapped
For a stock to qualify for collateralized financing it must have a minimum 30-day average trading volume of US$300,000, however each would be considered on a case by case basis.
The principal balance of loan cannot exceed 75% of the value of the collateral at loan closing.
The borrower makes monthly or quarterly interest payments at fixed annual rates of between 3% and 6.5%, as set by loan underwriting.
All collateral securities must be electronic format, and must be transferred into, and held in an account at a designated custodian during the term of the loan.
Loan terms can be between one and fixe years, with option for annual extension at Lender’s sole and absolute discretion.
Dividends and other share-related benefits are disbursed at loan term.

Repo Transactions features

REPO transactions give sellers an opportunity to liquidate’ a single block of publicly-traded securities at a discount, with an option to repurchase securities at a later date at the same discount, less the agreed-upon interest rate. The REPO transaction features include:

The seller must be seeking to sell a quantity of securities with an aggregate value of at least US$4,000,000
For a stock to qualify for a REPO Transaction it must have a minimum 30-day average trading volume of US$300,000
The funder will purchase qualifying securities for a discount of a least 30% of their current market value
The seller has the opportunity to exercise a repurchase option during a set period of between 1 and 5 years at an equivalent discount, less accrued interest of between 4% and 6%

Block Trading Features

Where a Seller desires to liquidate an entire block of securities with no intention of repurchasing those securities at a later date. The funder will purchase securities at a discount with full cash delivery to the seller pursuant to an expedited delivery-versus-payment (DVP) protocol.

The seller must be seeking to a sell a quantity of securities with an aggregated value of at least US$4,000,000
The securities with be purchased at a discount of a least 30£ of their current market value
Cash settlement will occur within 1 day of closing of Cash Collateral Control Agreement

Stock loans, Repo and block trade application, and funding process

The funders usually request’s similar information and reviews loan, REPO and block trade applications pursuant to a common set of evolution and underwriting standards:

The Applicant identifies the underlying securities by trading symbol and exchange and specifies the number of shares that the Applicant proposes to include in the transaction.
The Applicant submits identification and other information, including banking and brokerage information, to enable firm to satisfy its regulatory obligations such as the Know-Your-Client (KYC) and Anti-Money Laundering (AML) protocols.
Lender determines, to its own satisfaction, that the securities meet all internal minimum trading and liquidity standards, that they are not restricted or encumbered in any way, and that they are in proper custodial format.
If the Applicant is approved, Lender issues a binding agreement to the Applicant, who then reviews, signs and returns the agreement within a specified period.
The Applicant transfers the securities, in electronic format, into an account at a custodian designated by Lender.
Upon verification of receipt of the securities, Lender proceeds to fund the transaction per the terms of agreement
For both securities collateralized loans and REPO transactions, the Application has an opportunity to recover possession of the securities at loan or transaction maturity date, either by repaying the principal balance of the loan or by repurchasing the securities at an agreed-upon discounted rate. Shares are returned within 3 business days of payment verification.

Stock loans, Repo and block trade application, and funding process

What we do

Global reach

We advise and arrange high value mortgages in the UK and internationally. We use hundreds of international lenders to source and negotiate the best possible terms.

Our clients are from all over the world and borrow in multiple countries and in multiple currencies. Our team is multi lingual and we have a network of international offices.

Personal services

We are a privately owned company of specialist high net worth mortgage brokers. We are discreet, private and independent. We are exclusively on your side.

We talk straight, get to the point, negotiate on your behalf and manage all parties to ensure a smooth process from application to completion. We work when you need us to and are always available to speak.

Unrivalled expertise

Our track record speaks for itself. We have arranged some of the largest and most complex mortgages on behalf of a wide range of clients for over a decade. We are market leaders for high value mortgages in the UK and internationally and have a stunning track record of returning clients.

We know this market better than anyone else.

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