Securities Financing

Stock Loans As The Preferred Liquidity Solution

Apart from stock loans, investors generally have two options when they need liquidity:

Holding cash or liquid assets in their portfolios that offer negligible returns;

Selling securities at current market rates, thus forfeiting the future growth and earnings potential that those securities might provide.

Euro Credit's stock loan program offers the intelligent investor a third option. That investor can hold the majority or all of his or her assets in high-yield equity securities. When the need for liquidity arises, the investor can then use those securities as collateral for a loan without forfeiting any price growth and other value increases in those securities. During the term of the loan, the collateral securities are held in a custodial account and the investor can use the loan cash principal balance for any purpose, including further diversiﬁcation and growth of the investor's portfolio.

Unlike traditional bank loans and credit facilities, Euro Credit's stock loans have no effect on a borrower's creditworthiness. Our loans are all non-recourse. In the event that a borrower elects not to repay the principal balance of a stock loan, our only recourse is to assume full ownership of the collateral securities. We do not require personal guarantees and we will not pursue a borrower's assets other than the collateral securities in the event of non-payment or some other default.

As recent market events have demonstrated, investors that have signiﬁcant holdings in particular equity securities can create an adverse effect on the market price of those securities when they seek to liquidate large blocks of stock. When those equity securities are used to collateralize a loan rather than being sold to create liquidity, the stock loan will not have the same direct adverse effect on the stock price.

Euro Credit has also structured its program to source and originate loans that are collateralized with securities on most major international exchanges and public trading platforms, regardless of whether those securities meet standard margin requirements, including, without limitation, stock that regularly trades at per-share prices below US$5.00 per share, stocks from issues that have recently gone public, and OTC or “pink sheet” securities.

Unlike direct sales of securities, stock loans may also create tax-advantaged returns with limited capital gains effects. Prospective borrowers should understand, however, that Euro Credit is not a licensed financial or investment advisor and does not provide legal or tax advice. Further, Euro Credit disclaims all liability or obligations for the same. Borrowers should consult with their legal and tax advisors regarding their legal and tax ﬁling obligations in their respective jurisdictions regarding stock loans.

Innovative liquidity Solutions

Wealth managers and investment advisors generally counsel their clients to maintain a portion of their portfolios in assets that can be quickly converted to cash as the need for liquidity arises. Assets with that liquidity proﬁle, however, provide low or no returns, leaving the investor with underperforming assets in his or her portfolio.

Euro Credit's innovative stock loan program is the perfect solution that enables investors to hold higher-performance assets in a portfolio with a simultaneous ability to realize cash liquidity as quickly as the need for cash arises. With our program, an investor can use any equity securities that are traded on a public exchange, including blue-chip corporate stock, non-marginable securities, and other equity-linked tradable products as collateral for a low-interest non-recourse cash loan. In response to our program and in a very short amount of time, investors have come to recognize Euro Credit as the premier lender in the international stock loan industry.

Euro Credit built its stock loan program on the highest principles of professionalism and responsiveness. When you come to Euro Credit for a solution to your cash liquidity needs, you will always receive:

Dedicated one-on-one service from a stock loan industry specialist who will act as your partner to respond to all of your inquiries and to guide you through our application process;

Straightforward loan application documents and underwriting processes that will not distract you from your other business obligations;

Clear and consistent explanations of how Euro Credit evaluates stock loan applications and underwrites and sources stock loans;

Loan funding schedules that meet your liquidity needs;

Thorough disclosures of all loan fees and interest charges;

Loan servicing that remains within Euro Credit's corporate structure and that is never outsourced to third parties;

Full protection of your loan collateral, including protection of your upside potential in that collateral, with prompt return delivery of your collateral securities following your repayment of the loan principal balance and interest.

Euro Credit understands that liquidity demands can arise with little or no notice and that investors often need to tap cash liquidity on short notice. Accordingly, we have developed our stock loan program to fund loans in most cases within fourteen days after a loan applicant submits a completed application to our loan underwriters.

Basic Stock Loan Parameters

Euro Credit does not solicit prospective borrowers directly to secure a stock loan through our innovative liquidity solutions. Further, we have formulated our stock loan program such that we will source and fund loans only to the extent that those loans fall within the following minimum parameters:

The principal balance of any single stock loan must be no less than US$2,500,000;

A loan-to-value (LTV) ratios of no more than 65%, based on an average daily trading price over a speciﬁc trading period;

Prior to issuing a loan commitment, Euro Credit will analyze the trading and liquidity history of the collateral shares as part of its underwriting process, and will base the terms and conditions of its loan commitment on the results of its analysis;

The borrower pays interest-only during the term of the loan, with quarterly payments based on simple interest rates of between 3.5% and 6%;

Minimum loan term of two years with no prepayment allowed during the ﬁrst year of the loan;

Maximum loan term of ﬁve years, with up to ﬁve successive one-year extensions at Euro Credit's sole and absolute discretion;

The collateral securities must be transferred in electronic format into a custodial account with a custodian designated by Euro Credit;

The borrower must be the designated owner of record of the stock at the time of the loan closing, with shares being held in the borrower's name immediately prior to transfer to the designated custodian;

Euro Credit will not require disclosure of the proposed use of loan proceeds;

The collateral securities must be transferred in electronic format into a custodial account with a custodian designated by Euro Credit;

The loan program is offered only in those jurisdictions that do not preclude, limit, or regulate securities loans.

Euro Credit is a direct provider of certain specific services. Euro Credit reserves the right to refer inquiries for some services to third parties that are licensed or registered to provide those services where licensing or registration may be required by the laws of the applicable jurisdictions in which those services are offered. Euro Credit provides its services fully in accordance with applicable laws, rules, and regulations of all jurisdictions in which it conducts business or otherwise engages in transactions with contracting counterparts, either directly to the extent that an obligation, exemption, or exclusion for licensure applies, or otherwise through third-party licensees.

Stock Loans As The Preferred Liquidity Solution

Innovative liquidity Solutions

Basic Stock Loan Parameters

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