What Are 144 Restricted Stock Loans
144 restricted stock loans differ than standard issue stock loans in that the stock thats being used to secure the stock loan against has to have the rule 144 restriction legend removed before the lender can issue a loan to the 144 restricted stock loan applicant. We provide our client SEC Rule 144 compliant procedures to get our clients the liquidity they need by being allowed to use their 144 restricted stock as collateral to take a stock loan. We also ensure that each rule and regulation is followed along the way. Control and restricted stock loans are commonly used for SEC Rule 144 compliant financing. Restricted stock is issued with a ‘restricted legend’ on the stock certificate. Shareholders with restricted stock may only sell their shares in compliance with SEC regulation.
How Can We Help Clients With 144 Restricted Stock
We work closely with insiders and company owners of stock though our lending program to provide SEC Rule 144 approved stock loans that an insider can use by freeing up to 50% of their shares to obtain a 144 restricted stock loan. Our 144 restricted stock loan product will give the borrower liquidity by using their shares to obtain a stock loan which they would not previously have been able to do with the 144 restriction legend being placed against the shares. This transaction is complex yet effective while retaining potential asset appreciation all the while providing liquidity to the borrower. Although complex as it sounds we just follow a well set procedure as laid out by the 144 restriction lawyers, share transfer agents, custodian and stock loan lender to deliver a stock loan at 50% of their stock holdings value. With a 144 restriction in place the client would not have previously been able to obtain lending against their shares.
What Is Rule 144?
Rule 144 is the most common exemption that allows the resale of unregistered securities in the public stock market, which is otherwise illegal in the U.S. The regulation gives a specific set of conditions that a shareholder must meet in order to sell unregistered, “restricted,” or “controlled” securities in the public marketplace. For a shareholder to sell securities (such as stock, bonds, equities) on the public stock market, the securities and sale need to be registered with the U.S. Securities and Exchange Commission (SEC). Securities that are not registered or that are labeled as “restricted” or “controlled” generally cannot be sold or resold on the public market. However, there are several exemptions for the resale of restricted securities, and Rule 144 is the most commonly used. This means that though technically not selling the shares and just taking a loan against them that the loan is still able to qualify.
Why Are Some Shares Given The 144 Restricted Stock Loan?
Restricted stock refers to unregistered shares of ownership in a corporation that are issued to corporate affiliates, such as executives and directors. Restricted stock is non-transferable and must be traded in compliance with special Securities and Exchange Commission (SEC) regulations. The restrictions are intended to deter premature selling that might adversely affect the company. Restricted stock typically becomes available for sale under a graded vesting schedule that lasts several years. Insiders are given restricted stock after merger and acquisition activity, underwriting activity, and affiliate ownership in order to prevent premature selling that might adversely affect the company. An executive may have to forfeit restricted stock if he leaves the company, fails to meet corporate or personal performance goals, or runs afoul of SEC trading restrictions. The SEC regulations that govern the trading of restricted stock are outlined under SEC Rule 144, which describes the registration and public trading of restricted stock and the limits on holding periods and volume.
How do I remove a restrictive legend from my stock certificate?
Removing a restricted legend is a complex process governed by regulations. If your shares have a restrictive legend, contact your broker to request the proper paperwork and procedure. Brokers and clearing agents are sometimes particular regarding what forms and disclosures they require before assisting in the removal of a restricted legend from a security. Legal opinions (from company counsel or outside counsel) are also sometimes needed to remove a restricted legend.
How Do 144 Restricted Stock Loans Work?
There is a process that needs to be followed with 144 restricted stock loans and the below is a basic overview. The below process is not an exact science as there some parts of the 144 stock loan legend removal process that requires a lot more detail.
- Inquire with us so we can ascertain if the stock loan has a 144 restricted legend in place.
- We will send to lender and obtain lending term sheet.
- We will refer you to a registered 144 restricted stock loan lawyer to start the legend removal process.
- Removal process takes around 4 weeks
- We will advise you which custodian to open an account with in preparation for them to receive the electronic shares
- Once unrestricted shares are with custodian the lender will issue the Master Loan Agreement
- Client signs the master loan agreement and returns to the lender
- Lender requests a custodian statement confirming shares are with the custodian
- Client signs a copy of the custodian statement and returns to the lender
- The lender will issue the stock loan proceeds on a (DVP) deliver vs payment basis which is T + 2 days
We provide non-recourse 144 Restricted Stock Loans as well as block purchases for companies listed on most major Stock Exchanges. We also help arrange stock loan financing for many other stock markets in North America, Middle America, Central America and Southern America. We perform the complicated sourcing, filing and processing for you, and we can help support you on your way to success with our competitively priced lending and terms. Our asset lending capital feature highly competitive interest based on the present prime rates. Plus, our loans extend anywhere from 3 months to 10 years, which is an ideal amount of time for many individuals seeking a good amount of capital and a reasonable amount of time to make payments on their loans.
Platinum Global Stock Loans provides non-recourse 144 restricted stock loans and block purchases on the worlds main Stock Exchanges. Our specialty is non-recourse stock loans, using global Stock Exchange traded stock as the only collateral. A typical stock loan would be a 3 months to 10 year interest only loan with a super competitive interest rate based on prime interest rate. With over 5 years of experience in stock loan lending, we are poised to help you find the right 144 restricted stock loan for your needs.
Sometimes referred to as securities lending or a non-recourse stock loan issued by securities lenders, these short term loans are available to help shareholders and investors keep the stock asset they own while having access to fast cash they need to make other hard asset investments or to pay off debt.
Our 144 resricted stock loan amounts are dependent on the security, the liquidity, number of shares, price, volatility, trading volume and additional criteria determined to secure, approve and fund the loan. We offer several options for interest payments including monthly and quarterly during the life of the loan. We keep the process easy as pie, once you fully repay the loan, your stock is transferred back to you in full.
How Do I Qualify for a 144 Restricted Stock Loan?
Any owner of a Non-Marginable 144 restricted stock loan security is eligible and can be approved for a loan. The size of the stock loan can vary greatly depending on the borrower’s ability to handle the payments and structure of the loan. The loan process is quick, and turn times to money are usually within 48 hours of closing.
The Main Advantages 144 Restricted Stock Loans?
With stock loans or block trades, it’s all about flexibility. Non-recourse stock loans 144 restricted gives the borrower the opportunity to walk away from the loan at any time without affecting the borrowers credit score or liability. These types of loans are much more appealing than traditional margin loans due to no liability issues. The stock loan structure is set up where no collateral and no personal guarantee is required by the securities financing lender.
Basic Requirements for 144 Restricted Stock Loans
✓ Minimum loan amount of $500,000 USD to $500,000,000
✓ Your stock restrictions can have 144 restrictions as we have lawyers that can help remove these
✓ Private stock or stock that is not currently trading on an exchange is not eligible (no stop signs or skull and crossbones)
✓ Loans are available to all shareholders worldwide regardless of country
✓ All loans are non-recourse with zero liability to the borrower
144 Restricted Stock Loan Terms
✓ Loan to Value up to 70% depending on securities
✓ Interest Only terms with competitive rates with lock up period
✓ Terms 3 months to -10 years
✓ All dividends paid directly to you
As a direct lender, the only collateral is your stock no credit or background checks or personal liability. We offer competitive loan-to-value ratios, based on market conditions, sector, stock performance and future performance. Typical loan-to-value ratios can range from 45-70%.
We offer competitive rates based on the current prime interest rate and loan terms of 12, 24, and 36 months. Your privacy is important to us, so your transaction is always kept confidential with all personal information securely stored.
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1. 144 Restricted Stock Loans
Platinum Global provides non-recourse 144 restricted stock loans share pledge financing based on any Stock Exchange. Typically the interest rate is 2.5 – 5.5% based on the collateral provided for stocks and securities as collateral on the 144 restricted stock loan lenders.
2.What Are 144 Restricted Stock Loans
Restricted stock is issued with a ‘restricted legend’ on the stock certificate. Shareholders with restricted stock may only sell their shares in compliance with SEC regulation. If you are the owner, CEO or significant or minority shareholder of a listed company in United States. You will be able to pledge the shares that you own in the company in exchange for capital without selling them for stock loans, share pledge financing or stock pledge financing. Platinum Global is a privately held liquidity solutions provider for Europe, The Americas and South East Asian Countries such as Hong Kong, Singapore, Malaysia and Indonesia as well as global securities financing on other worldwide stock exchanges. We provide funding against the shares you or your company owns. This allows you to raise capital quickly and easily and at a low interest rate with share pledge financing. Platinum Global Stock Loans works closely with owners of publicly traded companies to bring liquidity quickly and easily. Stock Loans?
3. What Is A 144 restricted Non-Recourse Stock Loan?
A 144 restricted non – recourse stock loan means that no personal guarantees are required by the applicant. This means that in the event of non -payment used by the borrower, the assets will be used to settle the arrears of the loan. If the asset value is insufficient to cover the outstanding amount of the loan, Platinum Global Stock Loans will absorb the difference and no additional payments by the borrower are required.
4. What Are The Benefits Of 144 Restricted Stock Loans?
Stock loans enable you to obtain pledge stocks that you own in a public traded entity for immediate liquidity and funding.
Funds can be used for working capital, recapitalising the company or for personal investment.
At Platinum Global Stock Loans we do not limit how funds should be used.
5. How Much Can I Loan?
Platinum Global Stock Loans can provide financing from $100,000 USD to $500,000,000 USD.
Depending on the underlying share used as collateral, the LTV or Loan to Value can range from 45% to 70% of the value of the share pledged.
6. How Long Can I Take A Stock Loan For?
Platinum Global Stock Loans can structure loan programs between 3 months to 10 years on a renewable basis.
The applicant can opt for interest only payments on a monthly basis, or principle plus interest payments.
We are also able to structure customized payment plans according to your requirements such as quarterly or semi-annual payments
7. How Fast Will I Be Able To Receive Funds?
We are able to give you an in-principle approval within 24 hours and an confirmed offer within 2 working days.
The assessment process is quick and easy with no documentation required other than the loan amount requested, the amount of shares and the ticker name for collateralized stock loans.
For example, if you would like to see if your stock can be used for pledge, simply let us know
- Amount of Shares
- Loan Amount Required
- Ticker Name
And we will be able to let you know the amount approved within 24 hours, but most likely sooner
8. How Will I Receive The Funds?
Once you have signed our offer letter the following steps take place
- Offer Letter Signed
- Custodian Forms and KYC are sent to you to sign and complete
- Custodian Forms and KYC is completed and returned
- Within 3- 5 working days a custodian account is opened for you to make the transfer of the securities you wish to pledge
- Securities are transferred to the custodian and the loan amount is simultaneously transferred via a Delivery –versus-Payment Process (DvP)
- The loan transaction is now completed and payment is made according to the payment schedule
Restricted Stock: Rule 144
When you acquire restricted securities or hold control securities, you must find an exemption from the SEC’s registration requirements to sell them in the marketplace. Rule 144 allows public resale of restricted and control securities if a number of conditions are met.
Restricted securities are securities acquired in unregistered, private sales from the issuer or from an affiliate of the issuer. Investors typically receive restricted securities through private placement offerings, Regulation D offerings, employee stock benefit plans, as compensation for professional services, or in exchange for providing “seed money” or start-up capital to the company.
Control securities are those held by an affiliate of the issuing company. An affiliate is a person, such as a director or large shareholder (10% or more), in a relationship of control with the issuer. Control means the power to direct the management and policies of the company in question, whether through the ownership of voting securities, by contract, or otherwise.
If you acquire restricted securities, you almost always will receive a certificate stamped with a “restricted” legend. The legend indicates that the securities may not be resold in the marketplace unless they are registered with the SEC or are exempt from the registration requirements. The certificates of control securities are usually not stamped with a legend.
Rule 144 Conditions
If you want to sell your restricted or control securities to the public, you can follow the conditions set forth in Rule 144. The rule is not the exclusive means for selling restricted or control securities, but it provides a “safe harbor” exemption to sellers. The rule’s five conditions are summarized below:
Before you may sell restricted securities in the marketplace, you must hold them for at least one year. The one-year holding period begins when the securities were bought and fully paid for. The holding period applies only to restricted securities.
Adequate Current Information
Current financial information must be made available to the buyer. Companies that file 10-K and 10Q reports satisfy this requirement.
Trading Volume Formula
After the one-year holding period, the number of shares you may sell during any three-month period cannot exceed the greater of 1% of the outstanding shares of the same class being sold, or if the class is listed on a stock exchange or quoted on Nasdaq, the greater of 1% or the average reported weekly trading volume during the four weeks preceding filing of Form 144 (Notice of Proposed Sale) with the SEC.
Ordinary Brokerage Transaction
The sales must be handled in all respects as routine trading transactions, and brokers may not receive more than a normal commission. Neither the seller nor the broker can solicit orders to buy the securities.
Filing Notice With the SEC
At the time you place your order, you must file a notice with the SEC on Form 144 if the sale involves more than 500 shares or the aggregate dollar amount is greater than $10,000 in any three-month period. The sale must take place within three months of filing the form and, if the securities have not been sold, you must file an amended notice.
How Can We Help You?
The markets can be confusing and difficult to navigate when you need liquidity. This is where Platinum Global Stock Loans can help. When a traditional bank or lender cannot help you with your securities lending and stock loan requirements we are here to get you the funds you need. Our goal is to expand your access to liquidity, whether you are an individual or a business. Our solutions are fast and secure, aiding you in your journey to financial diversification. Investing in a restricted 144 stock loan can yield plenty of reward, if you only know how to secure one.