What's a HedgeLoan?

HedgeLender offers securities-backed loan quotes with a variety of features, but our classic and original loan offering was our trademark HedgeLoan®, a loan in which the risk of loss was hedged in some approved manner by the lender to ensure return of shares and protection for the collateral.

Today, HedgeLender only offers one true HedgeLoan® brand product through its pioneering its institutional Premier loan program. The client authorizes purchase of a "put" option as part of the loan, which fixes lender risk of portfolio loss sufficient to offer a virtually nonrecourse loan -- one in which the client's liability should they default on repayment is limited to the collateral that secures the portfolio, even if it has dropped precipitously in value. Such loans will typically come with no margin calls, interest-only terms, and higher loan-to-value than is common to conventional margin loans.

The idea behind a HedgeLoan is to reduce lender risk while simultaneously reducing borrower exposure. When the lender cannot, by contract, go after any other asset than the collateral securities, and the lender's risk of loss has been fixed through the purchase of the option, both sides gain a benefit. The lender can add various additional features for the borrower per his risk model and other factors.

A question we sometimes receive at HedgeLender is "Just what does the phrase 'hedge' mean as used in HedgeLender's trade name means. The "hedge" used in our trade name is used in the original generic sense that goes by to our founding days, namely, "to reduce risk of negative outcomes," the very same definition as in "She hedged her bets against rain by bringing her umbrella." To put it slightly differently, we hope and believe as we always have that our services can be a useful complement to your existing securities finance and liquidity planning techniques.

Full disclosure and information is available on any and all HedgeLender loan services. HedgeLender also urges our clients to speak freely with their Premier account managers and personal advisors to ensure that any and all questions are answered prior to their concluding of any loan. HedgeLender staff are, of course, always available as well to assist with your questions as they arise.