- Client: Monaco Resident, Danish National
- Loan amount: £4,000,000
- Structure: Interest only, 4-year term
- Rate: 2.5% over base rate
- Arrangement fee: 0.75%
Enness was approached by a Danish national and Monaco resident who was looking to raise £4 million using securities-backed lending. Rather than selling investments to release capital, the client wanted to retain ownership of their securities while accessing liquidity for their wider financial requirements.
The international nature of the client’s circumstances meant flexibility was particularly important. The facility was structured over four years on an interest-only basis, with drawings available in USD, EUR and GBP. This allowed the client to access funds in the currency most appropriate to their requirements.
Enness worked with its network of specialist lenders to identify a suitable provider for the size and structure of the facility. The final terms provided a £4 million facility at 2.5% over base rate, with a 0.75% arrangement fee. The facility also included a 1% non-utilisation fee on any undrawn balance.
The structure gave the client the flexibility to draw funds as required rather than having to take the full facility immediately. Once an amount was repaid, however, it could not subsequently be redrawn, making the structure and anticipated funding requirements important considerations when arranging the facility.
For international clients with significant investment holdings, securities-backed lending can provide access to liquidity without requiring investments to be sold. The right structure will depend on the securities being offered as collateral, the borrower’s circumstances and the lender’s criteria.
This case demonstrates the flexibility that can be achieved when the facility is negotiated around the client’s wider requirements. By considering the client’s international position, preferred currencies and anticipated use of the funds, Enness was able to secure a structure designed around the way the client intended to use the facility.
If you are considering using an investment portfolio to raise liquidity, Enness can explore the securities-backed lending options available for your circumstances. Speak to a Securities-Backed Lending Specialist to discuss your requirements.
Risk Warning:
Securities-backed lending involves risks. If the value of the securities used as collateral falls, you may be required to provide additional collateral or repay part of the loan. Failure to meet the lender’s requirements could result in the sale of pledged assets. The value of investments can fall as well as rise.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax 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.
