- Client: Jersey Resident
- Security: AIM-listed stock, market capitalisation of c. £400,000,000
- Security value: £2,000,000
- Loan amount: £1,050,000
- Product: 5-year fixed
- Interest rate: 4.25%
Enness was approached by a Jersey resident who wanted to raise liquidity against a single stock holding listed on AIM. The capital was intended to provide the deposit for a residential property in Jersey, allowing the client to access funds without selling their investment.
The main challenge was the nature of the security. While private banks will commonly consider diversified investment portfolios and more established blue-chip stocks, lending against a single line of lesser-known AIM-listed stock requires a more specialist approach.
Enness identified a specialist lender that was comfortable taking the shares as security and structured a £1.05 million facility against the £2 million holding. The facility was agreed on a five-year fixed basis at 4.25%.
The transaction was proposed, negotiated, approved and completed in around four weeks. This gave the client access to the capital needed for the property purchase while allowing them to retain ownership of the underlying investment.
For investors with a significant holding in a single company, single stock loans can provide an alternative way to raise liquidity without immediately disposing of the shares. However, the availability of finance depends heavily on the characteristics and liquidity of the stock, as well as the lender’s appetite for that particular security.
This case demonstrates the importance of finding a lender that understands the underlying investment rather than applying a standard approach designed for diversified portfolios. By matching the client with a specialist lender, Enness was able to structure finance around the specific security and the client’s wider objective.
If you hold a concentrated position in a listed company and are looking to raise liquidity without selling your shares, Enness can explore the single stock lending options available for your circumstances.
Risk Warning:
Single stock lending carries risks. The value of listed shares can fall significantly, and a decline in the value of the securities used as collateral may result in additional requirements from the lender or the sale of pledged assets. You could lose some or all of the value of your investment.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Enness does not give advice on Securities-Backed Lending or investments and lender introductions are unregulated. Finance is subject to lender criteria, underwriting and the suitability of the securities offered as collateral.
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.
