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Pledged Asset
(redirected from Pledged Assets)

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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.


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The firm, which sees Mr Dudley take over from embattled chief executive Tony Hayward, said it had also pledged assets, including interests in production from its major Thunder Horse and Mad Dog operations, to support a pounds 20bn compensation fund.
After the $580 million threshold is reached, the Company is required to pay 50% of realized proceeds from dispositions of pledged assets and annual excess cash flow, which is reduced to 25% when the outstanding balance of the new secured debt is less than $950 million.
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.
 
 
 
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