Interest Rates and Terms

For information on eligible securities please click here.

A. B. Nicholas did not arrive at this financial program by accident. At our expense and time, we investigated a variety of securities finance programs and used our many years of experience in the industry to arrive at what we believe to be the very best credit line program in the market today. Our lead lending partner, the firm we send the majority of our clients into, is over 100 years old, a major U.S.-based investment bank and brokerage operation licensed in all fifty states and most foreign markets. It's staff includes award-winning advisors respected in the community for their knowledge and acumen. The specific office and program we work with is specialized for this type of financing alone, and does not publicly advertise. The rates we negotiate for you as ABN clients are always better than what a client could get on his or her own. These lending facilities, after all, have traditionally only been for internal clients with long-standing relationships and significant deposits, not for outside clients.

You therefore begin from the start with multiple advantages when you choose to work through ABN. First, you have the security of a major, fully regulated and transparent U.S. financial institution; rates and terms unavailable to the general public until now;and services that are usually available only to high net-worth clients who have large deposits and long-standing relationships with their institutions. You, as owner of stocks, bonds, or mutual funds valued at as low as $100,000 (as opposed to the $1M or up you'd need just to be considered traditionally) - can receive terms superior in many cases to those offered to the institution's best clients, and significantly better than standard bank rates for financing of proportional size.

Remember too that few institutions today even offer credit lines, loans, or any other financing against stocks. In the wake of the economic meltdown that began in 2008 and persists to this day, only a handful of regulated, licensed institutions will even consider financing against securities, much less to walk-in clients. Unfortunately, this has driven many clients to seek risky and in some cases even illegal "nonrecourse" stock loans where the purported "lender" quietly sells the client's securities to fund the "loan" then keeps the difference as his profit while he hopes the client walks away (the "nonrecourse" provision) so that he need not go back into the market later to purchase the securities to return to the client. These firms tend to have no financial reserves, no audited financials, and no accountability, as the esteemed organization FINRA recently observed in a memo warning stock owners of these loan programs. Often, they fall like a house of cards, leaving the client unable to get his/her securities back at any price.

That's why we at ABN sought an institutional solution that not only ensured that the client would retain title and that the shares would not be sold, but provided huge benefits, including no prepayment penalty, very low interest rates, free research and support services from a licensed advisor, freedom to trade in the account provided that account value is maintained, and many other benefits tailored expressly for A. B. Nicholas clients alone.

Today we are proud to be able to unabashedly offer the very best securities-based financing in the market today, bar none. And in the unlikely case that you as client receive a written offer that is better in any respect than our offer, ABN will be sure to use its clout to ensure that your counter-offer outclasses the field.

Below please find our current rates and terms as of the fourth quarter of 2011. Should these change, this page will be updated.

Please note that any loan can be established in a valid third-party's name (e.g., a business, a real estate partnership, or a trust) and not only in the name of the actual client signatory. All programs fund within 72 hours of signing of the credit line agreement (typically, credit line agreement is signed the same day stocks arrive into client's new account.) Note that you must open your own personal or business brokerage account at our partner's U.S. brokerage, but that this is solely your account, not jointly owned, and that you have full online access and reports on demand. (Note that if your stocks currently reside at Mitsubishi UFJ Financial, you need not open an account at our U.S. lending institution, but may keep them there.)

Please note that all rates are based on a lender house-rate formulation for the internal cost of funds. The formulation of that cost is not disclosed to the public for proprietary reasons.

All ABN clients are free to convert their adjustable rate loans to fixed rate loans at any time without cost. Note that the adjustable rate, however, has not changed since December of 200 and that most client prefer to retain the benefits inherent in their credit line. Fixed rates are based on the corresponding LIBOR Swap rate plus a portfolio-size dependent margin that drops as the portfolio size increases. Full details are available from your licensed lender advisor on request. All transactions enter their financing as credit lines; if a fixed rate is desired, it will be arranged after the credit line has been opened.

Control or restricted stock: If the underlying stock is a U.S. stock and if it trades at $10 or higher, there is a very high probability that we can provide a credit line against it. The maximum LTV for a credit line against control or restricted stock is 60%. Please note that every restricted stock is handled on a case-by-case basis, and that if you are interested in a loan against such stock, your first step is to send us a brokerage statement or other evidence to support your (or your client's) ownership of the securities. Every case involving restricted shares is different.

Foreign Shares: We welcome applicants, whether U.S. or foreign citizens, with U.S. or foreign stocks from major world markets. We accept Canadian, UK, Australian, HK, and most EC market firms. Other countries will be evaluated on a case-by-case basis.

To begin your application for a quote, please prepare a picture ID (driver's license or passport) and a copy of a recent brokerage account statement. Please note that screen shots or typed lists of stocks will not be acceptable proof of ownership; we will need a copy of an actual account statement.

Once you have assembled the required docs, please click here to apply. Attach your documents and answer the few questions on the online form. Within 24 hours (typically less), we will deliver to you a term sheet. If accepted, you'll sign and fax back or attach it and send back via email, and we will then take you directly into your lending institution to open your account and proceed to funding. Your ABN fees will be clearly listed on your Term Sheet—there are no additional fees—and payment is due by wire transfer when your line of credit is opened as agreed.

Quotes are for illustration purposes only, and should not be considered final. Final rates and terms shall be determined solely by the lender at the time of application using current metrics.

N o loan program on this page may be treated as a tax shelter or tax avoidance program under any circumstances. Please consult with a licensed tax advisor and/or the IRS website (www.IRS.gov) for precise and proper treatment of all loan proceeds. No shares are sold through this program to fund any loan offered herein. SIPC and its logos are the exclusive property of the Securities Investor Protection Corporation; all mention and usage is for illustration purposes only. Proceeds may not be used to purchase marginable securities per federal regulations governing non-purpose credit. All other lawful uses are unrestricted. No transfer-of-title, nonrecourse, or similar services are offered by ABN or its staff or consultants. Proceeding with this site presumes you have read and agreed with the above.

Copyright © 2011, A. B. Nicholas & Co.
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Phone: 1.202.379.4744
Fax: 1.202.204.5131