Loan Process

Sample Loan

Borrow funds by using securities as collateral

Here's a straightforward example of a securities loan process, including how the strike price and value of the loan
are determined:

Stock owned: 10,000 shares of ExxonMobil (U.S.: XOM)

            * You pledge 10,000 shares of ExxonMobil for loan.

            * Global Bancorp offers you a LTV ratio of 70 percent.

            * After accepting the terms, you transfer 10,000 shares to Global Bancorp's brokerage account.

            * On the day the 10,000 shares clear and post to Global Bancorp's account, the closing
               price for XOM (as reported by Bloomberg*) is $72.90.

            * The closing prices for XOM on the next two business days are $73.10 and $72.76.

            * The average of these three consecutive closing prices is $72.92 ($72.90 + $73.10 + $72.76 = $218.76 / 3 = $72.92).
               This is the "strike price" for this loan.

            * The total value of the pledged collateral (for purposes of determining the final loan amount prior
               to funding) is $729,200 (10,000 x $72.92).

            * The loan amount is 70 percent of $729,200 or $510,440.

            * During the pendency of the loan, Global Bancorp will sell all or the majority of the stock (upon full repayment
               of the loan, Global Bancorp will take all necessary steps to reacquire the collateral for return to the borrower).


Note: There may be tax consequences to you as a result of a transaction like this example. Global Bancorp cannot provide you with tax or other legal advice, and you are urged to contact your own legal counsel and accountants to evaluate your particular situation and determine any potential consequences to you.

*Bloomberg is a trademark of Bloomberg L.P. All rights reserved.