No doubt which failed in the recent past

Is it always easier to finance its stock The answer is not clear. Requested several times, BNP Paribas does not wish to communicate on the subject. While LCL laconically replied "no longer be funding, lack of demand". In contrast, Vincent Joulia, Director of the private bank and transatlantic Bank wealth management, is inexhaustible. "We are asked every day, welcomed." The market is very active since July 2009. "For cause, the discrete private bank of avenue Franklin Roosevelt in Paris has made stock options full trade, where the Council and the funding cannot be separated from management. For its part, Alain Caron, lead by the Council of the Société Générale asset management, considers even support "valuable" accompanying the optionor in the porting of its actions by the establishment of appropriate funding and protection against the lower prices. In other words, the handling of stock options is sensitive. Should proceed with caution. No doubt, which failed in the recent past. Indeed, the uncertainty of scholarships does nothing to believe that the title will be to provide significant gains or at worst, it will simply be the exercise price. In any case, these two bankers are in agreement: the stock must always fit into a comprehensive heritage strategy to make the best use.

Secure its gains

Practically, the right to exercise stock options is not a gift. It allows to acquire securities at a preferential rate. Still in the "lift" in order to achieve added value. The recipient who lacks cash to pay cash has the choice between several solutions to finance its acquisition and secure his gains. Firstly, the lift-assignment. In this case, the securities are sold upon their lifting. The approach is safe and inexpensive. The disadvantage: it eliminates the hope of greater gains. In addition, it does not benefit from tax softening obtained after the period of two years portage, where capital gains excluding social security payments (12.1) are taxed at 18 to EUR 152.500 while the common tax system and fixed 30 two years before.

For those who delay the sale, banks offer three forms of loan. The first is to ask leave to discovered on his bank account. Clearly defined by a contract, in terms of amount and rate, this custom line of credit provides repayable money according to the financial availabilities of the borrower permanently. The interests are only due on the money borrowed. Dividends received during the portage of the titles are immediately used to reduce the overdraft which can be repaid at any time, for example, when the market allows the transfer of securities or a gift of securities occurred. "This flexibility of operations explains why 99 of our loans work according to this schema", says Vincent Joulia.

The second track of funding is the depreciable property loan. Here, the employee borrows the whole of the amount necessary for the lifting of its shares and reimburses constant maturity the principal and interest. As the advancement of the loan, the interest, calculated on the amount of the remaining capital due, are decreasing while the share of capital increases. It is rarely used because "it does not correspond to an optimal tax mounting", says Alain Caron, advocating instead the third solution, the advance heritage repayable in fine. Here, the optionor does that pays interest at constant maturities during the term of the loan, the capital is repaid once at the end of the contract. This credit is more expensive to the borrower. But it has the advantage of power place "elsewhere" amounts which are not dedicated to the repayment of capital and (or) to use the amount of the dividend of its stock as a lever of the operation.

Attention, if the use of credit is a practical solution, is not less that the value of the removed options is subject to the vagaries of market. And the gain is random as long as the shares are not sold. Precisely the risk is even greater that a substantial share of the heritage is exposed to a single title. Fortunately, solutions of protection was put in place to protect themselves from price fluctuations. "They must be even systematically best practices for major operations," said Vincent Joulia.

Guaranteed courses cover fixed the course of sale of the shares in advance. It freezes and guaranteed earnings, regardless of the level of the title at the end of the Assembly without make it possible for the shareholder to take advantage of an upward evolution of his title.

Cover "tunnel" offers the ability to follow the evolution of the market between both upward and downward (floor, ceiling courses courses). This fluctuation range to protect its gains and limit its losses represents the margin of variation that the shareholder considers acceptable in terms of compensation or risk.

Cover minimum prices guaranteed with participation increasing guarantees a minimum course below the value of the title. This formula helps protect both actions against a fall of prices below a floor course and to retain a certain percentage of rising above the floor. Without costs of implementation, the formula has disadvantage to enjoy only a fraction of the possible increase of the title from the guaranteed price. Finally, the floor course provides an opportunity to ensure a minimum course while taking advantage of the increase in the action. This coverage is charged, in contrast to the first three, at zero premium.

Watering clause

Excited about a few years ago, many banks now show a certain timidity to express themselves on the stock debt financing. Because, in an uncertain stock market context, their flying requires more the competence of experts that the notice of mainstream commercial. In addition, the use of the credit has become much more difficult and demanding guarantees (pledge of securities and/or savings, mortgage).

Under this aspect, the watering clause deserves special attention. If in the context of protection that the Bank is grants for it - even, this provision requires the optionor to make additional payments of capital by the amount of its stock is always at least equal to the amount of the secured debt. A formidable sword of Damocles over the head of the optionor which requires as well to be cautious to be well surrounded!