Liquid Securities Finance
Loans against liquid financial securities or liquid securities finance is one of our strengths.
Financial assets: $5m-$10bn
- Dry loans, no need for AUM.
- Single asset exposure, not a problem.
- Absence of time and territorial barriers in securing loan: Clients could be anywhere in the world, yet receive value service and secure loans to finance their current securities also anywhere.
- Privacy: Highest level of confidentiality and respect of personal data of client given up during the loan’s application process.
- In some cases, pre-IPO transactions could also be financed, if the listing is underwritten by a respected investment bank.
- PIPE (private investment into public equity) could also be structured in a leveraged deal.
- Loan collateral type: liquid traded stocks/liquid shares (could be trading on any exchange globally, no private placements), ETFs, Mutual funds and other liquid tradeable securities; mainstream liquid cryptocurrency (like Bitcoin, not exotic ones), Bank guarantees from banks with recognizable credit (S&P, Moodies and Fitch rating agency ratings only accepted).
- Flexible and comfortable loan plans: our company offers time value loans to cater for your funding needs with terms that are not flexible and relatively affordable in nature.
- Loan size:
- £20 000 000
- Year:
- 2021
A loan of over $20m was approved for a company this year – 2021 to finance their current liquid securities owed to a bank, stretching to cover a period of time cumulating to more than 7 years.
- Loan size:
- £15 000 000
- Year:
- 2021
Also, within this year — 2021, a company approached us for a cash loan amounting to about $15m intended to be used in their current equivalent amount owed to a bank and provided a bank guarantee for refinance.
- Loan size:
- £5 000 000
- Year:
- 2021
A Client company received a loan of $5m from our institutional client in 2020 which was employed in the financing of acquisition of cryptocurrency and used this crypto as a collateral.
- Loan size:
- Confidential
- Year:
- 2019
An investment in liquid securities by a company was also duly financed by loans emanating from our hedge fund client in 2019, in a bid to acquire more shares in their company and gain control as a result.
- Loan size:
- $5 000 000
- Year:
$5m loan was raised to the shareholder for an AIM-listed company.
- Loan size:
- €200 000 000
- Year:
- 2020
In 2020, we structured a EUR200m loan for a European real estate holding company against EUR240m Eurobonds held in treasury.
- Loan size:
- $30 000 000
- Year:
- 2020
In 2020, we also helped to secure a $30m private loan for a Turkish family holding company against their shares in a company listed on ISE.
We Work with Specialised Liquid
Securities Financing Companies, because:
These private lending institutions and are not private banks. They do not require AUM (assets under management) and do not have any problem with a single stock exposure.
They understand these securities, regulation related with them as well as and can easily adapt to real market trends.
Stanley constantly in dialogue with all liquid security financing firms in order to assess their capabilities and service quality. We have an internal scoring system for these.
They make use of timely information in dealing with transactions.
The luxury being financed is delivered on time (either as agreed or with a reasonable period).
They offer confidentiality, speed, privacy and mutual collaboration when dealing with such transactions.
These firms are cash worthy and have strong financial security so as not to be short in honouring their side of the contract.
For PIPE and pre-IPO transactions, they analyse financial data in a bid to assess potential future share price.
They ensure that the security against which they provide the leverage is of value or has prospects of obtaining value over time.
These private lending institutions and are not private banks. They do not require AUM (assets under management) and do not have any problem with a single stock exposure.
They understand these securities, regulation related with them as well as and can easily adapt to real market trends.
They offer confidentiality, speed, privacy and mutual collaboration when dealing with such transactions.
They make use of timely information in dealing with transactions.
The luxury being financed is delivered on time (either as agreed or with a reasonable period).
They ensure that the security against which they provide the leverage is of value or has prospects of obtaining value over time.
These firms are cash worthy and have strong financial security so as not to be short in honouring their side of the contract.
For PIPE and pre-IPO transactions, they analyse financial data in a bid to assess potential future share price.
Ploutos is constantly in dialogue with all liquid security financing firms in order to assess their capabilities and service quality. We have an internal scoring system for these.
Confidence
Once you decide on raising the leverage against a liquid security or instrument, you'll often discover that it is not as easy as it seems, because traditional leverage providers are private banks and either they require a diversified portfolio or they do not understand the security (such as cryptocurrency) or the leverage LTV is very low. We offer a rapid solution in a confidential manner to source the lender and to.
To enter a secure leverage contract against your liquid assets, you will need one paramount thing which is confidence. We understand and cherish the trust and confidence that you have granted us as to a reliable and secure financing partner, ready to advise you on securing collateralised loans, credits and other facilities from lending institutions who will always be there for you throughout your funding needs and sometimes your trading journey (as some customers buy and sell liquid securities for trading purposes and need leverage to execute these).
With a long-standing experience and accolades in alternative financing against liquid securities, Stanley Corporation understand the customs and intricates of the security financing processes and works with some of the fastest moving investors in this and related fields who do not only help to finance against the securities, but could also support during the trading, pre-IPO or PIPE journey. These institutions understand the potential resale or swap in order to help the acquirer in their journey to turn profit in the long-run out of their purchase.
We work with a number of fast-moving money-in-the-bank and flexible institutions who understand the security finance process and who have professional approach and analytical capability to assess the risk and offer solutions. This in turn provides them with needed tools to issue current security financing offers on securities quickly with clear indication of timing and information needs.
How Much does liquid securities finance cost?
The costs associated with security financing depend on the risk of the entire transaction, tenor of the loan, affordability for the client, liquidity of the underlying securities, speed of execution and the size of the deal. However, usually it is pretty low and rarely exceed single digits. We have structured deals with interest rates as low as 4-5% per annum + fees. When talking about costs, we encourage the acquirer to consider the cost of money from the perspective of total business plan of a project.
A hypothetical liquid
security finance example
Purchase the security estate for 100% her own cash, if she has the purchasing power. Here, she makes an expected profit of more than the purchase price of say 10% in 6-month time and takes hence $700k profit.
Put down $2m equity and borrow further $5m at say 10% per annum cost (although high number and in reality, it is lower, we have taken a round number for simplicity and includes all fees and expenses etc). After 6 months, securities are sold for 10% profit or $700k, she clears finance costs of $250k (calculated as 5% of $5m because of 6-month time horizon), it is expected that she makes a profit of $450k or 22.5% return on $2m invested, not bad for a $2m investment.
Advisable Process
On the borrower side, we have worked closely with both financial institutions like banks who want to secure financing against their treasure bonds or treasury shares, sophisticated brokers, alternative funds (who invested or plan to invest into public equities, bonds, ETFs, cryptocurrency etc), HNWI/UHNWIs, family offices, corporates and many other types of clients to effortlessly secures loans to finance for their current securities and cater for their other financial services which we offer and who have approached our institution for advice, credit, money as well as the overall supervision and security of the entire processes involved.
In order to make process of financing your liquid securities more certain, we duly recommend preparing for the credit or loan well in advance, ensuring that you know what you want and possess a corresponding financial capacity or income stream to secure the finance for the most optimal price because once our financing process commences, the Client needs to provide relevant information in order to make the process smooth and efficient.
Before venturing into securing a loan or credit for your liquid securities, it is generally recommended that you conduct your own research and prepare your business plan thoroughly as regards to the target purpose for the loan. Maybe you want to buy a stake in a target listed business or intending to acquire a portion of newly issued bonds.
Things to consider are:
- Knowing the targeted class of security for investment
- Reliability level of the company or platform offering the security
- The accompanying liability of the intended security
- Market price of the security
- Initial market price for the security from issuing firm
- Market price for securities on resale
- Current or potential liquidity of the security
- If looking at shares:
- New to the stock market/ already existing in the stock market
- Experiencing a dip at the moment and have potential to recover/ On the rise at the moment and potential to further rise
- Market capitalisation, daily trading volume
- Concentration of shares
- Acceptability of the Security based on your location
- Ability to maintain the security (shares or bonds) at an acceptable custodian
- Market (stock) trends
- Finally, your budget
On the borrower side, we have worked closely with both financial institutions like banks who want to secure financing against their treasure bonds or treasury shares, sophisticated brokers, alternative funds (who invested or plan to invest into public equities, bonds, ETFs, cryptocurrency etc), HNWI/UHNWIs, family offices, corporates and many other types of clients to effortlessly secures loans to finance for their current securities and cater for their other financial services which we offer and who have approached our institution for advice, credit, money as well as the overall supervision and security of the entire processes involved.
Once the lender is identified and their interest is determined, we then start the loan application process. The process also involves formalisation of our relations with the Borrower or the client.
Have quality information and knowledge about the collateral security and your business plan. We then apply on your behalf for the financing. In case you are targeting acquisition of new securities, contact us with the necessary documents and the facts about these securities and we will commence the instrument financing process.