- Client: Monaco UBO
- Collateral: Shares listed on the Frankfurt Stock Exchange
- Loan amount: c. $3M
- LTV: 55%
- Interest rate: 3.25%
Securities-backed lending can provide liquidity without requiring a borrower to sell an existing investment portfolio. While it is often used in property financing, it can also be used to refinance existing borrowing, reinvest in the market or access capital for a particular opportunity.
In this case, we helped a Monaco-based ultimate beneficial owner (UBO) refinance an existing loan. The proposed collateral consisted of shares in a biotechnology company listed on the Frankfurt Stock Exchange.
The shares had a market capitalisation of approximately $130M, with an average daily trading volume of around €5,000. Given the nature of the underlying security and its relatively limited trading volume, the transaction required a lender comfortable with the specific characteristics of the shares.
Enness reviewed the proposed collateral and approached suitable providers with experience in securities-backed lending. We secured a facility of approximately $3M at 55% LTV, with an interest rate of 3.25%.
The structure allowed the client to refinance the existing borrowing while retaining exposure to the underlying shares. For borrowers with substantial listed investments, securities-backed lending can provide an alternative to selling assets when liquidity is required. The amount available will depend on factors including the type of security, its market value, liquidity and the lender’s criteria.
Where a facility is secured against a concentrated or less liquid holding, the underlying investment profile is particularly important. Changes in the value of the shares can affect the level of available borrowing and may result in a lender requiring additional collateral or repayment.
Enness works with specialist providers across the securities-backed lending market, helping clients explore tailored financing against eligible investment assets. For clients considering a Lombard loan, the appropriate structure will depend on the underlying assets, the borrower’s circumstances and the lender’s requirements.
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:
Securities-backed lending carries significant risks. The value of listed 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.
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.
