A bond loan is when someone who owns free trading
bonds and wants to borrow money, uses the bonds owned as collateral for the
loan. Since each bond that is being used as collateral is different and the loan
features can vary significantly, each publicly traded bond will be evaluated on
a case-by-case basis.
We can offer securities based lending for:
- T-Bills, T-Notes, T-Bonds
MTN's - Medium Term Notes
rated or higher issued by a name bank)
T Bills can be pledged as
collateral with fixed interest rates from 2% and sometimes lower.
And, we may be able to structure the terms as a
matching, where all the coupon interest from the bond goes toward the interest
due on the loan. This means that no interest payments to make.
There are basically three types of marketable
treasury securities: Treasury bills, Treasury notes and Treasury bonds.
Treasury Bills (or T-Bills)
mature in one year or less. Like zero-coupon bonds, they do not pay interest
prior to maturity; instead they are sold at a discount of the par value to
create a positive yield to maturity. Many regard Treasury bills as the least
risky investment available to U.S. investors. Like other securities, individual
issues of T-bills are identified with a unique CUSIP number.
Treasury Notes (or T-Notes)
mature in two to ten years. They have a coupon payment every six months, and are
commonly issued with maturities dates of 2, 3, 5, 7 or 10 years, for
denominations from $100 to $1,000,000.
Treasury Bonds (T-Bonds,
or the long bond) have the longest maturity, from twenty years to thirty years.
They have a coupon payment every six months like T-Notes, and are commonly
issued with maturity of thirty years.
We offer a Non-Recourse bond Loan – A bond
collateral Loan with NO personal liability. A non-recourse Loan is secured by
some form of collateral, your bonds. If there is a default, the borrower
keeps the loan proceeds and the lender only claims the collateral. The
borrower’s liability is limited to the collateral pledged for the loan. In fact,
you have the right to walk away from the loan anytime.
NO Credit Report
NO Employment Required
NO Income Required
Low FIXED Interest Rate
Loan Terms: 2,3,5, 7 years
Quick Closing and Funding
A bond loan is the
lending of funds collateralized by shares of a publicly traded bonds that you
OWN, domestic or foreign. It gives the borrower access to the liquidity of the
assets without actually selling the stock. The term of the loan is typically
two to seven years and the bonds are returned upon repayment of the loan.
Corporate Bond: A type
of bond issued by a corporation. Corporate bonds often pay higher rates than
government or municipal bonds, because they tend to be riskier. The bond holder
receives interest payments (yield) and the principal, usually $1000, is repaid
on a fixed maturity date (bonds can mature anywhere between 1 to 30 years).
Generally, changes in interest rates are reflected in bond prices. Bonds are
considered to be less risky than stocks, since the company has to pay off all
its debts (including bonds) before it handles its obligations to stockholders.
Corporate bonds have a wide range of ratings and yields because the financial
health of the issuers can vary widely. A high-quality Blue Chip company might
have bonds carrying an investment-grade rating such as AA (with a low yield but
a lower risk of default), while a startup company might have bonds carrying a
"junk bond" rating (with a high yield but a higher risk of default). Corporate
bonds are traded on major exchanges and are taxable.
Treasury Bond: Also
called U.S. Treasury bond or T-bond. A negotiable, coupon-bearing debt
obligation issued by the U.S. government and backed by its full faith and
credit, having a maturity of more than 7 years. Interest is paid semi-annually.
Treasury bonds are exempt from state and local taxes. These securities have the
longest maturity of any bond issued by the U.S. Treasury, from 10 to 30 years.
The 30-year bond is also called the "long bond." Denominations range from $1000
to $1 million. Treasury bonds pay interest every 6 months at a fixed coupon
rate. These bonds are not callable, but some older Treasury bonds available on
the secondary market are callable within five years of the maturity date.
Medium Term Notes: (MTN’s)
are debt instruments which are created and issued by banks and sold to
investors, having a predefined face value, date of maturity, and annual interest
rate. Though an MTN has similar characteristics to other debt notes, it is
completely unique due to its flexibility, price, resale potential, and ability
to be purchased at a discount from face.