- Client: UK-based
- Loan amount: £1.3M
- Security value: £1.857M
- LTV: 70%
- Security: US-listed stock
- Interest rate: 2.20%
Enness was approached by a UK-based client who needed to raise liquidity to meet an upcoming tax bill. Rather than selling part of their investment portfolio to generate the required capital, the client wanted to use US-listed stock as security for a Lombard facility.
The timing was particularly important. The client wanted to secure the available pricing in January ahead of an anticipated interest rate increase in April, while retaining the flexibility to draw the funds only when they were needed.
Enness sourced a 70% loan-to-value non-recourse facility against securities valued at £1.857M, providing a £1.3M credit line. The structure included a lock-in option, allowing the client to secure the agreed terms in advance, alongside the flexibility to draw down the facility as required.
Using investments as security can provide an alternative way to access liquidity without necessarily selling the underlying assets. For clients with concentrated or substantial investment portfolios, this can be useful where capital is required for a specific liability or opportunity but retaining the investment position remains important.
However, securities-backed lending is highly dependent on the nature and value of the underlying investments, as well as lender criteria. Enness works with specialist providers to structure Lombard loans around the borrower’s requirements and the assets being offered as security.
In this case, the combination of a competitive rate, 70% LTV and flexible drawdown structure provided the client with access to the liquidity required while retaining the underlying US-listed stock.
Risk Warning:
Securities-backed lending involves risks, including the possibility that the value of the underlying securities may fall. If the value of the collateral declines, the lender may require additional collateral or repayment, and securities used as security may be sold. Borrowers should ensure they understand the risks and have an appropriate repayment strategy before proceeding.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, due diligence, asset suitability and lender criteria. Enness does not provide advice on securities-backed lending or investments, and lender introductions are unregulated.
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.
