- Security Value: £3 million+
- Loan Amount: £1.7 million+
- LTV: 55%
- Share Type: UK-listed stock
Enness was approached by an entrepreneur based in London who was looking to create liquidity to invest in a new business venture. The client was the founder and CEO of a global manufacturing company listed on the London Stock Exchange and had accumulated a significant shareholding in the business since founding and floating the company almost a decade earlier.
The client had previously considered a Lombard loan through their private bank but found that the loan-to-value available against their concentrated shareholding was relatively limited. Enness reviewed the client’s wider circumstances and identified specialist lenders with a greater appetite for financing against a single listed stock position.
Single-stock lending can provide shareholders with access to liquidity without requiring them to immediately sell a concentrated holding. However, these facilities are typically more complex to arrange than conventional securities-backed lending because lenders assess factors including the underlying company, share liquidity, concentration of the position and the borrower’s overall circumstances.
Enness approached specialist lenders that were experienced in structuring facilities against concentrated positions in listed companies. Indicative terms were presented to the client within 72 hours of the initial meeting, allowing them to quickly assess the available options and determine whether the proposed structure met their requirements.
Enness subsequently secured a facility of more than £1.7 million against a shareholding valued at more than £3 million, representing an LTV of 55%. The facility provided the client with the liquidity required to pursue their new venture while allowing them to retain their existing shareholding, subject to the agreed lending structure and terms.
The transaction was completed within four weeks of the initial meeting, demonstrating the importance of having access to lenders with the appetite and expertise to assess specialist securities-backed lending opportunities efficiently.
This case highlights how a concentrated position in a UK-listed company can potentially be used to access liquidity without an immediate sale of the underlying shares. Specialist securities-backed lending can provide an alternative to a conventional Lombard facility where a borrower requires a higher LTV or a more bespoke structure, subject to lender criteria.
Enness works with a network of specialist lenders experienced in Lombard loans and single-stock lending. If you hold a significant position in a listed company or investment portfolio and are looking to raise liquidity, speak to a mortgage specialist to discuss your circumstances.
Risk Warning:
Securities-backed lending carries risks. The value of listed securities can fall and may result in margin calls or enforcement action if agreed lending requirements are not maintained. Borrowers could lose some or all of the pledged assets, and the amount available to borrow can change as the value of the underlying securities fluctuates.
Disclaimer:
Enness does not give advice on Securities Backed Lending or investments and lender introductions are unregulated. This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, asset suitability and lender criteria. Terms and availability will vary depending on individual circumstances and the securities involved.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
