LANTAU HOLDINGS LTD.
Stock loans are a favored hedging strategy for shareholders, officers, hedge fund managers and private equity funds that want to keep some or all of the upside of their portfolio but mitigate their risk. This structure is an innovative method to obtain liquidity without the risk of a margin call upon a stock decline.
For shareholders that have a securities position or portfolio valued at $1,000,000.00 (USD) or more; a stock loan might be an appropriate option for you.
Lantau can provide up to $150,000,000.00 (USD) of instant liquidity through our securitized lending program which utilizes a Borrower’s common stock as collateral. The lending rates are generally between 3% and 10% annual interest with qualifying candidates receiving up to a 75% LTV rate.
For example, an individual has stock in Company X and believes the stock will appreciate in the coming years. Rather than liquidate their position in Company X, the shareholder transfers the shares to the lender and receives immediate liquidity.
If Company X’s stock appreciates during the loan term, the individual retains 100% of the market value at maturity. If the stock significantly declines, the individual can walk away from the loan and keep the original loan proceeds with no further obligation.
A stock loan is also non-purpose, allowing the borrower to invest in what he or she might need, both business and personal.