- Client: UK-based individual
- Asset: Significant holding in a single publicly listed US equity
- Facility: Share-backed revolving credit facility
- Loan-to-Value: Approximately 50%, subject to lender criteria
The client was a UK-based individual with a significant proportion of wealth held in a single publicly listed US equity. The client sought to access liquidity while retaining ownership of the underlying shares and maintaining their existing investment position.
The requirement was for a share-backed revolving credit facility at approximately 50% loan-to-value, subject to lender approval, asset suitability and prevailing market conditions. The revolving structure was intended to provide flexibility, allowing capital to be accessed as required rather than requiring the client to draw the full facility immediately.
The concentrated nature of the holding presented the principal challenge. Many lenders prefer diversified investment portfolios when considering securities-backed lending, as concentration in a single equity can increase exposure to movements in the value of the underlying security. The transaction therefore required a specialist lender able to consider concentrated equity exposure within its lending criteria.
Enness identified a specialist lender willing to consider a revolving facility secured against the single listed equity. The proposed structure incorporated appropriate lending parameters and was subject to the lender’s assessment of the underlying security, concentration risk, market conditions and the client’s circumstances.
The structure provided a potential route to accessing liquidity while allowing the client to retain ownership of the underlying shares. The revolving nature of the facility also provided flexibility around future capital requirements, subject to the agreed facility terms and ongoing lender requirements.
This case demonstrates how specialist securities-backed lending can provide alternative liquidity solutions for clients with concentrated listed equity holdings where conventional lending may not be suitable. Each transaction is assessed individually, with available leverage and terms dependent on the underlying assets, market conditions, lender criteria and the borrower’s circumstances.
ENNESS DOES NOT PROVIDE ADVICE ON SECURITIES-BACKED LENDING OR INVESTMENTS. LENDER INTRODUCTIONS ARE UNREGULATED. TERMS AND AVAILABILITY ARE SUBJECT TO INDIVIDUAL CIRCUMSTANCES, UNDERLYING SECURITIES AND LENDER CRITERIA.
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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.
