Pledged Share Stock Loans Increase Year on Year Allowing Clients To Access Better Stock Loan Financing Pledged share stock loan financing is more popular than ever as an alternative source of liquidity for significant shareholders in UK-listed companies. We explore the reasons why the market has reached new highs in the last two years – and what will drive its growth from here. Loans backed by pledged shares in UK-listed companies are taking off as a growing number of investors look to raise money from their shareholdings. Platinum Global are an institutional investment broker that specialises in long-term asset-backed financing. The number of equity-backed loans disclosed by directors of UK-listed companies more than doubled in 2020 compared with the previous year. Based on the trend observed so far in 2021, the transaction count is also on course to grow again in the full year, although the volume of loan proceeds raised may decline. Share pledges disclosed by directors in the year to August were worth over £412 million at the time the transactions were made public, compared with almost £2.4 billion in all of 2020. Using a typical industry loan-to-value (LTV) ratio of 65%, We calculate that these pledges translated into loans worth some £1.55 billion in 2020 and £269 million in the year to August 2021. Pledged Share Stock Loans These figures provide new insight into the evolution of share-backed financing, which is commonly referred to as Lombard lending in the UK. Market observers see it becoming increasingly broad-based, developing from a tool for high-net-worth individuals with billions of dollars of assets into an increasingly mainstream source of funding. Indeed, the more recent LSE data shows that share-backed financing is being used by a wider range of individual investors looking to raise smaller amounts of capital against shares in
Read more →Stock Loans and Share Loans – We Explain More About Them In This Article You are a high net worth individual or financial institution or perhaps a high level company executive. You have a valuable company or personal stock portfolio and don’t want to sell any of it to meet a current cash need. A non-recourse stock loan is a financial tool that you might consider in meeting your cash and liquidity needs. Let’s look at some of the most common questions we are asked. What is a stock loan? A stock loan is what it sounds like, it is a loan against the value of shares of stock you own. We lend based on a portion of the value of the shares of stock that you designate as collateral for the loan. Typically we will lend on up to 80% of the value of the shares, though in some cases it might be a bit lower based on the volatility of the underlying security, or other factors based on our analysis. We provide a fully non-recourse stock loans in amounts ranging from $250,000 all the way up to $500 million plus. A high percentage of our loans are in the $200 – $300 million range. We offer a low fixed interest rate of 3%, with terms ranging from 3 to 10 years. Your shares serve as collateral for the loan. They are held in a third-party, fully regulated, fully licensed brokerage account for your safety and ours. You can use virtually any publicly traded shares of stock to secure the loan. This includes companies traded on major exchanges, penny stocks plus international stocks traded on some exchanges worldwide. Among the stocks and other securities that are eligible for our program include: · Penny stocks/emerging growth stocks priced under $1.00 with
Read more →Pledged Share Stock Loan If you’ve ever thought about pledged share refinancing your share portfolio but were scared of the heavy lifting, chances are, you have been missing out. When the average stock portfolio holder can release cash from their existing portfolio at rates of around 3% thats not something to be sniffed at – don’t you think it’s time to stop stalling and consider your stock portfolio refinance options? There are generally two motivations for people to refinance their share portfolio – using the money to purchase another asset and pulling out equity from their stock portfolio to re-invest– you needn’t wait for these justifications to consider getting a loan to leverage your portfolio in a bull market. One motivation is internal – I want to acquire more assets – and the other is external – we want to do something, such as renovate or go on a holiday or pay off debt. So, the stock portfolio owner looks to stock loan brokers to see if there is a way to pull the equity out of the share portfolio by refinancing. Considering most stock portfolio owners never leverage up their stock portfolio its amazing how many investors are missing out on be able to take advantage of the good times using reasonable leverage of their share portfolio or even single stock portfolio. What happens after a few years is your loan situation changes. Your stock portfolio value goes up in value and you have a better loan to value ratio. Many investors do not realize the power and advantages of refinancing their existing stock portfolio using a pledged share stock loan but there are lenders out there that will happily provide the lending they require either for re-investment into the markets or for any other asset purchases they may
Read more →Chinese tycoons Jack Ma and Joe Tsai have pledged part of their combined $35bn (£25bn) stake in Alibaba in exchange for large pledged share loans from investment banks. The share pledges, which were made to lenders including UBS, Credit Suisse and Goldman Sachs, were made by offshore companies that control half of the two billionaire’s stake in the eCommerce giant, which totaled 5.8 per cent in December. The amounts of the share pledges were not disclosed but the pair have repeatedly borrowed against their stock since Alibaba’s US listing in 2014, according to documents seen by the Financial Times. Share pledges allow banks to accept stock as collateral for loans but the borrower retains ownership of the shares. Ma and Tsai, who are Alibaba’s two largest shareholders, have used the loans to access vast fortunes tied up in shares. According to the report, Tsai’s Gulfstream 650ER private jet is mortgaged to Credit Suisse. The Swiss bank, which oversaw the company’s IPO, also lent to a shell company linked to Ma’s purchase of a mansion in Hong Kong and a new plane the same model as Tsai’s. Alibaba said Ma did not have any outstanding loans borrowed against its stock while Tsai’s outstanding loans were “easily manageable” with “prudent loan-to-value ratios to provide [a] substantial cushion against triggering a margin call”. The company added that share pledges were “ordinary financial planning to provide liquidity and diversification without having to sell shares in Alibaba”. Alibaba Group Holding Ltd.’s largest individual shareholders Jack Ma and Joe Tsai pledged parts of their combined $35 billion stake in the e-commerce giant in exchange for significant loans from banks, the Financial Times reported, citing company documents. The share pledges were made by offshore companies controlling more than half of the duo’s stake in Alibaba, which stood
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