FAQs

FAQS about the Macquarie GEI plus

Who can open a GEI plus?

Individuals, partnerships, companies and trusts can open a Macquarie GEI plus.

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What's the loan term?

You can choose a loan term of between 1 to 5 years.

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What's the minimum loan amount?

The minimum loan amount is $50,000. You don’t need to contribute any upfront funds or additional security with a GEI plus as Macquarie lends you 100% of the value of your investment through an interest-only loan.

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What interest rate do I pay?

The interest rate on your loan is made up of the cost of borrowing 100% of the investment funds and the cost of your capital protection. Your interest rate will vary depending on the investments you choose, and the term of your loan. Generally, the less historically volatile the security, and the longer the loan term, the lower the interest rate. Download the GEI plus Approved Shares and Indicative Rates Sheet (pdf 160Kb) to view the current interest rates for the GEI plus.

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What shares can I invest in?

You can choose to construct your portfolio of securities from a selection of more than 80 securities listed on the ASX or from a range of pre-selected portfolios. Download the GEI plus Approved Shares and Indicative Rates Sheet (pdf 160Kb) for a full list of current approved securities and pre-selected portfolios. To select your shares, simply complete a GEI plus Share Selection Form (pdf 105Kb).

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What if I already own shares?

If you already own shares, you can protect your existing holdings by rolling them into a GEI plus. Whilst you retain ownership of the shares, Macquarie will hold security over them for the loan term, and give you their equivalent value in cash, less the borrowing costs, for you to use in any investment. To do this, your existing shares must be on the GEI plus Approved Shares and Indicative Rates Sheet (pdf 160Kb).

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How are shares bought?

Macquarie Equities Limited purchase shares on behalf of the investor. The securities are sponsored on CHESS by Macquarie or its nominee and are registered in the investor’s name, so you benefit from all available dividends, distributions and franking credits.

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Does it cost anything to switch or sell securities during my loan term?

Your interest rate is an average or blended rate of the individual securities in your portfolio. Therefore, if you switch or sell securities in your GEI plus before the end of your Loan term, your interest rate is reset, even if your interest rate is fixed at the time. Your new interest rate may be higher or lower than your original interest rate.

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What happens with dividends and franking credits?

All available dividends and franking credits will be paid to the investor.

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What happens with Corporate Actions?

When Corporate Actions occur, securities may be transferred to a Macquarie nominee company to ensure the investor’s interests, and Macquarie’s, are protected. If this occurs, any dividends, interest or sale proceeds relating to those transferred securities received during the transfer may be credited to the investor’s loan account or held as security for the loan, rather than paid directly to the investor. You can view all current corporate actions here.

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Can I prepay my interest?

You can prepay the interest on your GEI plus if you fix your interest rate. If you elect to prepay the first year’s interest before the securities have been purchased (on the basis of an indicative interest rate), you may need to pay some additional interest, or receive a refund, if the actual interest rate is different to the indicative one.

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Can I take out an Interest Prepayment Loan?

If you choose to fix your interest rate and pay your interest annually in advance, you can apply to borrow your interest prepayments through an Interest Prepayment Loan. Find out more about the Interest Prepayment Loan.

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Is the GEI plus covered by an ATO product ruling?

Macquarie has applied for a Product Ruling from the Australian Taxation Office to confirm that, for eligible investors, interest may be deductible up to the Reserve Bank of Australia (RBA) Indicator Variable  Rate for Standard Housing Loans.

If the Product Ruling is issued, Macquarie will confirm that fact and include reference details on this website. If the Product Ruling is materially adverse, then Macquarie will issue a supplemental Product Disclosure Statement.

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When do I receive statements?

You will receive a loan statement twice a year (generally at the end of June and December). You will also have access to view your loan details 24/7 via our secure client service website, GearUp.

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What happens at the end of my loan term?

Macquarie offers a range of options for you to choose from at the maturity of your GEI plus, including:

  • Sell your securities, repay the loan and repay any profits as cash;
  • Sell your securities, repay the loan and keep any remaining securities;
  • Repay the loan with your own funds and keep all profitable securities;
  • Roll over the loan to a Macquarie Margin Loan; and 
  • Rollover your shares to a new GEI plus for another term.

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What happens to the securities that are "unprofitable"?

Macquarie will sell your “unprofitable” securities, i.e. those securities that are below the Protected Price at maturity, and in this way satisfy your obligations with respect to the unprofitable portion of the loan.

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What if I want to close my GEI plus early?

It is possible to sell some or all of your investments and repay some or all of your Loan early (“unwind”), but there are costs involved in unwinding prior to the maturity date. For a full list of the costs associated with early unwind, download the GEI plus Combined Product Disclosure Statement and Financial Services Guide.

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Why are the break costs so high?

The essence of the GEI plus is that you buy a parcel of securities which are held for the full Loan term. The nature of the Loan capital protection is that it is expensive to unwind part or all of your Loan before maturity.

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© Macquarie Group This information is current as at 14 May 2008. The Geared Equities Investment plus (GEI plus) is offered by Macquarie Bank Limited ABN 46 008 583 542, AFS Licence 237502 (“Macquarie”). In deciding whether to acquire or continue to hold an investment, you should obtain  the GEI plus Combined Product Disclosure Statement  and Financial Services Guide dated 4 June 2004, including the Supplementary Product Disclosure Statements dated 30 May 2005, 29 may 2006, 1 July 2007 and 14 May 2008 (collectively "PDS"), and consider its contents. The PDS is available from this website or by phoning 1800 656 819. To acquire the product, you must complete the application form attached to the PDS.

Loan terms and conditions are set out in the GEI plus loan contract and fees and charges and government taxes and charges apply.
This advice has been prepared by Macquarie for general information purposes only, without taking into account any potential investors’ personal objectives, financial situation or needs. Before acting on this general advice, you must consider its appropriateness having regard to your own objectives, financial situation and needs.

All potential investors should obtain financial, legal and taxation advice before making any decision about whether to acquire that particular financial product. In particular, you should ensure that you understand the taxation consequences for you if you invest in the GEI plus and your payment obligations if you borrow under the Loan.

Macquarie or its associates, officers or employees may have interests in the financial products referred to in this information by acting in various roles including as investment banker, underwriter or dealer, holder of principal positions, broker, lender or adviser. Macquarie or its associates may receive fees, brokerage or commissions for acting in these capacities. In addition, Macquarie or its associates, officers or employees may buy or sell the financial products as principal or agent and as such may effect transactions which are not consistent with any recommendations in the information. You may contact Macquarie on 1800 656 819.