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 ?
Meantime, conditions imposed on pledged assets do have impact on the adoption of the Islamic pawnshop.
Specific types of restricted or pledged assets include those subject to repurchase and reverse purchase agreements, those pledged as collateral are placed under option agreements and letter stock or securities restricted as to sale (deposits with States are excluded).
The bank's liquid assets (excluding pledged assets) accounted for about a
For instance, Muthoot Finance, the largest player in the rapidly growing business, had to write off gold worth Rs 4 crore last year after it discovered that borrowers had pledged assets that were stolen.
The Chair of BDZ Holding's Board of Directors also made it clear that the bondholders had sent a letter two days ago, demanding an exhaustive list of BDZ's pledged assets with documents certifying the current status.
Importantly, we were able to mutually terminate a recently executed Security and Loan Agreement releasing all related and pledged assets, secured by this agreement.
The collateral limits the lenders' downside risk, and the fear of losing the pledged assets encourages borrowers to act prudently.
“With the growing complexity of the FHLB's credit and collateral policy it is becoming increasingly difficult for member banks to ensure pledged assets meet the Federal Home Loan Banks' standards in order to obtain maximum borrowing power,” said David Green, President and CEO of The StoneHill Group.
The pledged assets and the short-term note payable remained on Lehman's books as Lehman increased cash (assets) and short-term notes payable (liabilities) by the amount borrowed.
He also said that he had by then become aware that pledged assets of an insurance company were unable to be included as a principal asset.
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.