Key Facts:
- Client: European Client
- Loan amount: €30,000,000
- LTV: 47.5%
- Rate: 6.325%
- Security: Corporate bond
We recently helped a client who was looking to raise additional corporate liquidity against a single illiquid corporate bond.
In theory, you can use any financial asset as collateral for securities-backed lending. However, the more liquid and mainstream your financial assets are, the more options and lenders will be available to you. Enness has access to all lenders in this part of the market and will know which lenders to approach, whatever your situation and financing requirements.
Lenders generally like to see liquid and high volume stocks in this part of the market. That said, if you have an illiquid portfolio or stocks with a low trading volume, don't assume lenders will be deterred. Enness acts as a partner at every stage of the transaction, handling all the fundamental elements of the deal on your behalf, troubleshooting and handling whatever we can to ensure the process requires as little of your time as is possible.
In this case, we successfuly arranged a non-recourse loan worth €30m, with tenor to maturity of the bond. Non-recourse loan financing provides extensive benefits to borrowers as your personal assets are not tied to the loan. This means that even if you default on loans, the lender can only seize the collateral but cannot go after your personal assets. It's possible to get a single stock loan in many different circumstances, and a partner like Enness will help you source the best deal.
Enness' approach is not to treat single stock loans as a black and white business transaction. The loan conditions are important, and Enness' team understands that it's paramount that the lender is a good fit and that you're offered the terms that reflect your ambitions for your stocks. Enness negotiates the best single stock loan rates and negotiates the terms that fit with your vision and personal requirements.
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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.
