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Marketable Securities Backed Finance

With a history of lending to wealthy individuals and families, successful executives and their businesses, we have an in-depth understanding of how to value typical asset types and can often lend against these.

Marketable Securities Backed Finance

Rather than tap into an existing portfolio, you can use credit as a valuable funding tool; for your business, your lifestyle, your family’s future and your investments. Liquidating a portfolio or other assets prematurely may compromise your long-term goals, so borrowing funds may be a better strategy to preserve your assets and take advantage of investment opportunities.

Marketable securities financing can be approved against a variety of assets. You can borrow against them up to a certain percentage of their market value. The applicable loan to value ratio will depend on the type, currency, quality, volatility and liquidity of the security in question, as well as the diversification of your portfolio but we will regularly review all these factors with you.

Examples of acceptable types of collateral:

  • Equities/single stock
  • Commercial paper
  • Mutual funds
  • Fixed income/bonds
  • Preferred stocks
  • HSBC structured products
  • HSBC managed accounts
  • Hedge funds
Marketable securities financing can be approved rapidly against a variety of assets.

You may want to leverage your portfolio to meet certain short‑term business needs, or you may benefit from refinancing an existing loan. Your HSBC Private Banking Relationship Manager and credit advisory expert can work with you to determine the eligibility of your marketable securities portfolio.

The benefits of marketable securities backed finance include:

  • Liquidity to pursue your existing investment strategy and investment opportunities
  • Additional capital without selling securities
  • No interruption to your asset allocation and long-term investment strategy
  • Freedom to alter the strategy or focus of your portfolio being used as collateral
  • Credit lines/loans structured according to your individual needs with regards to type, amount, tenor, repayment and currency
  • Portfolio yield enhancement

Single Stock Collateral

 

We have the proficiency to accept single stock as collateral without liquidating your stocks. This tactic allows you to keep your long-term investment plan on track, so you will receive the dividends, interest or capital appreciation that may accrue.

You may have amassed significant shares in your employer’s company, sold a business in return for company shares, or hold a portfolio with concentrated stock positions. You may use your concentrated portfolio as collateral to obtain the financing you need without disturbing your long-term goals.

Risks of Leverage

  • Amplified Losses - The use of leverage means that losses will be amplified if there is negative performance. Furthermore the loan will still need to be repaid.
  • Collateral Maintenance - A fall in the value of your portfolio may result in a situation where the value of your collateral no longer covers the outstanding loan.
  • Interest Rate Impact - An increase in interest rates will impact your portfolio's performance. The return on your portfolio must be higher than your financing cost to generate a positive return.
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