Investors can increase their buying power with leveraged loan investing; National Life introduces a flexible and convenient program

TORONTO, Nov. 27, 2002 – Investors looking to increase their wealth through a leveraging strategy can access more capital to take advantage of current low market prices. Through National Life’s Segregated Fund Leveraged Loan Program, clients with non-registered assets can use existing savings to accelerate their investment buying power. With low interest rates, guarantees on principal deposits, and a variety of loan options and re-payment plans, the program offers convenience, flexibility and a relatively low-risk investment. All loans are fully underwritten by TD Canada Trust.

“This is a favorable time to borrow for investments. Markets have been low for quite some time and there’s a positive outlook that the upswing is near,” said Brenda Moore, Director of Marketing, Retirement and Investment Products. “National Life’s Segregated Fund Leveraged Loan Program is ideal for individual, high net worth investors with non-registered assets. With low interest rates that can be tax deductible and guaranteed principals, the advantage is on the borrower’s side.”

To invest using the Leveraged Loan Program, clients determine the amount of their initial investment and the amount they would like to borrow. They can then choose one of the following three options:

2:1 With Margin call(*)

  • TD Canada Trust will loan up to twice the amount of the initial deposit
  • The minimum loan is $15,000 and the maximum is $250,000
  • Margin call applies when the loan to value ratio reaches 85%

1:1 No Margin Option(*)

  • TD Canada Trust will lend an amount equal to the initial deposit
  • The minimum loan is $15,000 and the maximum is $100,000
  • No margin call

100% Loan Option(*)

  • TD Canada Trust will lend 100% of the investment amount; no initial deposit is required
  • Ontario and B.C. residents must have a minimum income of $60,000 for an individual and $75,000 total for joint borrowers. For all other Provinces and Territories, the minimum income is $50,000 for individuals and $65,000 total for joint borrowers
  • The maximum loan is 50% of net worth, to a maximum of $150,000
  • Margin Call applies when the LTVR reaches 120%

Depending on the amount borrowed, the interest charged is a floating rate between Prime and Prime plus .75%. The added bonus is that the interest can be tax deductible since the proceeds of the loan are being deposited into a non-registered investment.

Clients can also choose from two convenient payment plans, through monthly pre-authorized bank withdrawals:

Blended payments:

A combination of interest and principal, payments are based on an amortization of 30 years, which can be shortened at the client’s request.

Interest only:

Payments can change monthly and reflect the interest charged on the loan that month.

“We recognize that the past three years have not provided strong returns for investors, but as the markets start to turn around we want to help our clients get the best purchasing power for their investment dollar,” said Ms. Moore. “With the different loan options and payment plans, we believe that this program will provide clients with the opportunity to maximize their capital at this opportune time.”

(*) A full list of requirements and qualifications for each lending level is included in our marketing kit, which can be obtained by contacting National Life via email at [email protected]

National Life has been a strong performer in the insurance and financial industry for over a century, with a reputation for service excellence and product innovation. Providing individual insurance, group life and health insurance, and retirement and investment products across Canada and in parts of the Caribbean, National Life is a trusted name in the financial industry. Working in partnership with the industry’s top independent producers, National
Life’s network of expert resources provides long-term wealth management solutions to clients. The company was rated A (Excellent) by the A.M. Best Company, the oldest insurance rating agency in the world and has been recognized as one of “Canada’s Top 100 Employers” for the past three years by MediaCorp. National Life is a member of the Industrial Alliance Group of Companies, which ranks seventh among Canadian life insurers, with over $16 billion in assets under management and under administration.