Learn more about the stock loan business.
One of the questions we often get here at A. B. Nicholas is “If the market is trending downward, does it make sense to obtain a loan against my stock portfolio instead of selling it outright?” Because of the myriad different combinations of securities in any given portfolio, and many other factors both business and personal that can affect any answer to this question, we need to be cautious. But
Investors have many metrics for determining the valuation of a company’s stock, and two of the most commonly used are Book Value and Share Value (also known as Market Value). Both valuations can be helpful in calculating whether a stock is fairly valued. Let’s look briefly at the differences between the two as they can impact the loan-to-value of your LeverageLine line of credit. So What is Book Value? The book value of
OpLine is a Loan Against UPREIT Operating Partnership Unit Shares (OPUs). But What’s an UPREIT? What’s an OPU?
An umbrella partnership real estate investment trust, or UPREIT, is an entity that REITs use to let property owners contribute their real estate property in exchange for operating partnership units that can be converted into REIT shares. Like a 1031 exchange, this transaction lets property owners avoid capital gains taxes on appreciated real estate. The operating partnership, or OP, units received in an UPREIT transaction are generally similar to shares
Does Your or Your LeverageLine Client’s Stock, Bond, or Mutual Fund Portfolio Qualify for LeverageLine Financing?
One of the most frequent calls we get is about whether a particular portfolio qualifies for our versatile LeverageLine securities-portfolio credit line. The rules are pretty simple, but you can get more details on our website by visiting our page for Loan Requirements. You can also check on your client’s securities history yourself by clicking here. If the non-IRS/401K stocks, mutual funds, bonds, ETFs, etc. in your portfolio. All have
All standard (default) LeverageLine interest rates are variable rates, based on a discounted “house” rate (an institution-determined figure based on various indicators) that is keyed to the size of the credit line offer; to this is added a small increment based on 30-day (monthly) LIBOR. (See the 30-day LIBOR rate on any of the major financial sites, including Bloomberg or Bankrate; the rate has remained within a relatively small range of variance over the last seven years.)
How securities and cash figure in a LeverageLine securities-based line of credit.
Securities-based Financing – The Missing Piece in Most Financial Planning