- Client: US National
- Loan amount: $10M
- LTV: 30%
- Security: US-listed stock
Enness was approached by a US national looking to raise liquidity against a concentrated holding of US-listed stock. The client wanted to use the proceeds to purchase an additional investment property in the US while maintaining the existing shareholding.
A single stock loan provided a way to unlock capital from the existing investment without requiring the client to sell the shares. The relatively low 30% loan-to-value ratio also helped keep borrowing conservative relative to the underlying security.
For investors whose wealth is concentrated in a single listed company, this type of financing can provide greater flexibility. Rather than liquidating a significant shareholding to fund a new investment, a borrower may be able to use the shares as collateral while retaining their exposure to the company.
The client was looking for a $10M facility, and Enness approached specialist lenders who could consider the specific stock and the required level of lending. Given the specialist nature of securities-backed lending, lenders' appetite can vary considerably depending on the underlying shares, their liquidity, and the proposed loan-to-value ratio.
We secured a facility at an interest rate of 4.90%, providing the client with the liquidity needed to pursue an additional US property investment while retaining the existing stock position.
Single stock lending can be particularly useful for entrepreneurs, investors and business owners whose wealth is concentrated in one listed company. Enness works with specialist lenders to structure bespoke portfolio finance solutions around the underlying assets and the client’s objectives.
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, valuation, due diligence 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.
