pledged asset


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Pledged Asset

An asset that a borrower transfers to the possession of a lender as collateral for a loan. The borrower maintains ownership and all associated rights of the pledged asset. When the loan is repaid, the lender transfers possession back to the borrower. The pledged asset reduces the risk to the lender that the borrower will default, therefore possibly qualifying the borrower for some benefit, such as a lower interest rate. When buying a house, some mortgage borrowers will pledge an asset, such as stock, to the lender to qualify for a lower down payment. See also: Secured loan.

pledged asset

An asset used as security for a loan.
References in periodicals archive ?
On the life insurance side, according to a NAIC color-coded chart about 31 percent of companies had a percentage of pledged assets as of year-end 2011, higher than the other insurance sectors of P&C (about 20 percent), health (about 10 percent), title (about 10 percent) and fraternal a small universe of 14 companies where 10 had no assets pledged.
The ability to pledge collateral enhances a firm's debt capacity, and providing outside investors with the option to liquidate pledged assets acts as a strong disciplining device on borrowers.
There is a possibility of the foreign creditors having the first claim over the pledged assets of the company, leaving the domestic banks in the lurch," she added.
Kuwait, 24 August: Kuwaiti local banks are facing no pressure from the Central Bank of Kuwait (CBK) to liquidate pledged assets, Kuwaiti Banking Association (KBA) Chairman Abdelmajid al-Shatti said here Monday.
Preparers often struggle with the level of detail to provide in note disclosures of pledged assets and other collateral arrangements.
Amiri co-founder Richard Ellis told Reuters that Gulf-based investors have pledged assets to the fund of funds but investments will be made when the market shows signs of improvement.
465(c)(1) could increase their at-risk amount by borrowing funds from anyone, as long as the taxpayer/borrower was personally liable for loan repayment or had pledged assets as security.
Furthermore, governments and their depositories must mark to market the pledged assets (mark-to-market is a periodic adjustment of the book value of a security to reflect its market value).
The secured creditors may have restrictions imposed that limit their ability to attach the pledged assets - bad for the creditor, but good for the business as it tries to recover.