Effects of Leverage. Leverage can lead to quick losses as well as profits. You agree that a high leverage (a small amount of capital to control a larger amount) can lead to large losses when the market moves against your positions. Tradeview permits leverage based on a variety of factors and it may alter leverage limits for any client in its sole discretion should it deem it prudent to do so. Maximum leverage for Tradeview clients' accounts is subject to Client Categorization and prevailing European regulatory limits and as may be transposed within Malta's financial services regulatory framework, and which may be altered from time to time. Leverage limits, margin requirements and temporary leverage limitations are posted on Tradeview's website xxx.xxxxxxxxxxxxxxx.xxx
Effects of Leverage. The SSB Agreement provides for credit availability for the Fund, such that it may borrow up to $830 million.6 As of March 31, 2021, the Fund had utilized $830 million of the $830 million available under the SSB Agreement ($67 million of borrowings outstanding, and $763 million in structural leverage consisting of collateral received from SSB in connection with securities on loan), representing 22.8% of the Fund’s managed assets as of that date, and had $242 million of MRP Xxxxxx outstanding, representing 6.6% of the Fund’s managed assets. Combined, the borrowings under the SSB Agreement and the outstanding MRP Xxxxxx represented 29.4% of the Fund’s managed assets. Interest on the SSB Agreement is charged on the drawn amount at the rate of Overnight LIBOR plus 0.80%, payable monthly in arrears. Interest on overdue amounts or interest on the drawn amount paid during an event of default will be charged at Overnight LIBOR plus 2.80%. These rates represent floating rates of interest that may change over time. The SSB Agreement has a commitment fee of 0.10% of any undrawn amount. As of March 31, 2021, the interest rate charged under the SSB Agreement was 0.88%. “Net income” payments related to cash collateral in connection with securities lending were 0.44% of the borrowed amount on an annualized basis as of that date, although this amount can vary based on changes in underlying interest rates. The Fund’s MRP Shareholders are entitled to receive monthly cash dividends, at a currently effective dividend rate per annum for each series of MRP Shares as follows (subject to adjustment as described above in “Mandatory Redeemable Preferred Shares”): 3.70% for Series A MRP Shares, 4.00% for Series B MRP Shares and 4.24% for Series C MRP Shares. To cover the interest expense on the borrowings under the SSB Agreement (including “net income” payments made with respect to borrowings offset by collateral for securities on loan) and the dividend payments associated with the MRP Shares, based on rates in effect on March 31, 2021, the Fund’s portfolio would need to experience an annual return of 0.48% (before giving effect to expenses associated with senior securities). Leverage is a speculative technique that could adversely affect the returns to common shareholders. Leverage can cause the Fund to lose money and can magnify the effect of any losses. To the extent the income or capital appreciation derived from securities purchased with funds received from leverage exceeds the ...
