Canadian UBO Lombard Financing

• Client: Canadian UBO
• Collateral: Shares listed on NASDAQ
• Loan amount: c. $5M
• LTV: 50%
• Interest rate: 3.15% p.a.

A Lombard Loan can allow borrowers to raise liquidity against eligible marketable securities without selling their investments. This can be particularly useful when capital is required for a future opportunity but the borrower wants to maintain their existing investment position.

In this case, a Canadian ultimate beneficial owner (UBO) approached Enness looking to diversify their existing asset position and raise liquidity for a future property purchase and potential relocation to Europe. Rather than selling the underlying investments, the client wanted to explore a financing structure that would allow them to retain ownership of the securities while accessing capital.

The client held shares listed on NASDAQ, with the underlying company having a market capitalisation of approximately $130M and an average daily trading volume of around $10,000. The nature and liquidity of the shares were therefore important considerations when identifying suitable lenders.

Enness approached multiple lenders experienced in portfolio finance and securities-backed lending. Following discussions with the relevant providers, we were able to source a Lombard Loan of approximately $5M at 50% LTV, with an interest rate of 3.15% p.a.

The facility provided the client with access to liquidity for their longer-term plans while allowing them to retain their existing shareholding. The case demonstrates how Lombard lending can provide an alternative source of capital for investors who have significant listed assets but do not necessarily want to liquidate those investments to fund a new opportunity.

The amount that can be borrowed against securities will depend on factors such as the type of asset, its market value, liquidity and the individual lender’s criteria. Concentrated or less liquid holdings may also result in more conservative lending terms.

Enness works with a range of specialist lenders across the Lombard lending market, helping clients explore bespoke financing solutions against eligible investment assets. Each facility is subject to lender assessment, due diligence and the specific characteristics of the underlying securities.

Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, investment, legal or tax advice. Enness does not provide advice on Securities-Backed Lending or investments and lender introductions are unregulated. Finance is subject to lender criteria, due diligence and the eligibility of the underlying securities. Historical terms are not indicative of current or future pricing.

Risk Warning:
Lombard lending carries significant risks. The value of securities can fall, potentially resulting in a requirement to provide additional collateral or repay part of the facility. If required collateral is not maintained, the lender may sell the pledged securities, potentially crystallising losses. Borrowers could lose some or all of the value of their investments.