We were recently approached by a Hong Kong based UBO that had acquired shares in UK listed manufacturer of vanadium flow batteries. The shares were UK listed, with a market cap of circa £100 million and illiquid trading volume. The client wanted to borrow against their £12 million stock option in two trades.
In principle, you can use any financial asset as security for a lombard loan. However, the more liquid and mainstream your financial assets are, the more finance options exist. You will find that the vast majority of lombard loan lenders focus on the most vanilla part of the market. In essence, this means they will only offer loans collateralised against diversified portfolios and grade A securities. This caused a level of complexity in this case as the client's shares were illiquid.
Here at Enness, we work with the many lenders who pick up everything else, including more complex or unusual assets or very niche areas of the market. We always source the best pricing and terms from the market tailored to the individual circumstances of the customer.
After learning about your financing requirements, situation, requirements, and the stocks you'd like to secure the loan against, Enness will get straight to work. With a complete understanding of what you need, the team will approach lenders and negotiate on your behalf. As such, we arranged a non-recourse loan, including manageable margin calls with options to cure with combination of shares and cash. Moreover, the UBO retained equitable rights of the shares throughout the loan.