Line of Credit against Stock Portfolio

[Stuart Birdsong]

Hey BPers,

    I am currently working with a new money manager and they offer lines of credit against your current portfolio at LIBOR + 125 bps (overnight LIBOR). Which seems like fantastic for purchasing capabilities. Does anyone have experience doing this? Aside from extreme climbs in LIBOR rates do you see any negatives? 

It is secured against your stock assets, and you can only leverage 40-50%. (maybe more but I would be concerned about doing so)

Thoughts?

Thanks in advance!

Stuart

[Les Jean-Pierre]

I have heard of this before the bubble. I guess the concern is what happens if your stock portfolio crashes(and how you hedge your portfolio). Do they allow this against retirement funds? And what is the LTV?