A Credit Line Where Your Stocks Stay Close to Home
Around the world the U. S. financial markets are recognized even today for their superior innovation and competitive rates and terms. In most cases, a line of credit from a major public institution outside of the U. S. is much more expensive, slower to close, with much higher interest rates and much lower loan-to-value. Bureaucracy, fees, delays, high documentation — the list goes on.
A. B. Nicholas has developed a way to combine the best of both worlds: The convenience of keeping your securities in your own country and account, with the great features of our market-best LeverageLine. We serve the following non-U. S. markets:
- Hong Kong
- Western Europe
- American Depository Receipts (ADR)
So think of it: What if you could keep your securities in your own country with a simple lien on them to protect the lender; then obtain a U. S.-style loan but even more so, a LeverageLine™ U. S.-style loan. That means the most feature-rich securities-based line of credit in the market today (see a full description of LeverageLine here).
You’ll need “blue chip” stocks in their market. That means the upper tier of quality of stocks in your market. They will have a good long history — You’ll need at least $2 million worth if converted to U. S. dollars. Your best offers will come with multiple stocks in the portfolio.
We sometimes get transactions that are relatively large in your local (non-U.S.) terms. Keep in mind that your loan is with a major, well-known U.S. institution with HQ in Switzerland and the U. S., disclosed to you in full with your term sheet.
Your securities will be in your own account at their branch in your country. This account is not jointly owned but yours alone. The account is a normal brokerage account, with online access, freedom to trade as long as you do not reduce the value of the portfolio, all dividends to you, reports on demand and voting rights. Your annual interest rate will be between 1-3% and your loan-to-value will be between a low of 30% with no hedge up to a high (with hedge) of between 70%-90% depending on the volatility history of your shares.
Your new lending institution does the work for you. With your permission, they will open your solely-owned new account for you via their local branch. Your securities will be imported from your current brokerage or bank account, institution-to-institution, and upon arrival in your account you will simply have a powerful modern brokerage account, solely owned by you. The difference is that your LeverageLine agreement will be waiting for you if you wish to proceed (Nearly 100% of our clients do!)
At this point, you simply have a new brokerage account at a major financial institution. If you choose to sign your loan agreement, a background lien is placed on your account and a separate bank checking account at the same lending institution in the U. S. within 24-48 hours, ready for withdrawal of cash by check, wire, or ATM card with a high limit. You are charged only for what you actually draw from your line.
If you wish to have your line distributed from the firm’s European HQ, that is fine as well. Any currency is acceptable.
The same rate of interest applies to any draw amount with this program. The higher your line of credit, the lower your line for all draw amounts. If the rate is 1.5%, it applies to a drawdown of $5 million as well as $500.
Repayment is interest-only required, and you can pay down your principal at any time without penalty. Your line is a revolving line of credit, like a credit card, so there is no maturity date and you can close your line at any time by simply paying off whatever you owe. Your are always free to liquidate shares if you choose to pay what you owe.
When we give you your term sheet, you will get a full two-page offer with details. This will be pre-approved financing. Our fee will always be a percentage of the maximum line we will have delivered to you, typically between .5% and 2% of the line amount depending on the size.
Many portfolios will need to be hedged to assure that the asset cannot drop beyond a “floor” price and the collateral value remains stable. These “put” options will usually be rolled into the “all in” interest rate so that the interest rate we quote you will include the cost of the hedge.
Security and the many benefits of a U.S.-based loan that still allows you to keep your stock in your own country. Flexibility without dependence on credit. No restriction on use of funds except that they cannot be used to purchase more marginable securities.
Interested specifically in Asia markets? Click here. When you are ready to proceed, drop us a line here and let us know: 1) The stock ticker(s) in your portfolio and 2) The total value of the portfolio. We’ll give you a thumbs up or thumbs down. Or you may proceed directly to our simple but secure application form online immediately for a term sheet at https://abnicholas.com/quote We will have your term sheet within one business day in most cases.
When you want the great rates and terms of one of the best credit lines in the business but do not want to transfer title or sell your securities to fund; when you want the safety of a major licensed institution, and would like to establish a connection to a U. S. financial facility that can become a source for conventional lending later; when you want to keep your securities in your own country to retain full control over your collateral and your line; our International LeverageLine can be the perfect choice.