Portfolio review
Holdings are tested for listing status, transferability, liquidity and price observability. Ineligible lines are excluded from the borrowing base rather than discounted.
Securities-Backed Lending
Credit facilities secured against transferable securities held with a recognised custodian — liquidity without unwinding the portfolio behind it.
Borrowing against a portfolio you intend to keep
Selling assets to raise cash resets a strategy that may have taken years to build. Securities-backed facilities provide liquidity against a custodied portfolio while it remains invested, leaving income, corporate actions and voting rights with the holder.
Eligibility is decided on transferability, listing status and price observability rather than on headline valuation. Concentration is tested at issuer, sector and currency level, and the resulting borrowing base is the figure that governs the facility.
Where collateral is physical metal rather than financial instruments, see gold-secured lending.
Eligible collateral and advance rates
Sovereign bonds
Up to 70%
Investment grade issuers, liquid benchmark maturities.
Investment grade credit
Up to 65%
Rated corporate issues with observable secondary pricing.
Listed equities
Up to 55%
Primary exchange listings meeting daily liquidity tests.
Regulated funds
Up to 50%
Daily or weekly dealing with published net asset value.
High yield credit
Up to 40%
Case-by-case, subject to issuer and sector concentration.
Excluded
Not accepted
Unlisted holdings, restricted stock, and instruments without independent pricing.
How the facility works
Custody and control
Securities remain with a recognised custodian under a control agreement granting security without transferring beneficial ownership.
Borrowing base
Each eligible line is advanced at its asset-class rate, then adjusted for issuer, sector and currency concentration to produce a single facility limit.
Daily valuation
The portfolio is marked daily against independent pricing sources. Coverage ratios and headroom are reported to the borrower on request.
Margin management
A breach triggers a call curable by posting eligible securities, cash, or partial repayment. Realisation follows only where the cure period lapses.
Release
Security is discharged on repayment and the control arrangement is lifted with the custodian, restoring unrestricted dealing.
Why borrowers use it
Liquidity without disinvestment
Raise capital while the portfolio remains invested and dividends, coupons and voting rights stay with you.
Tax and timing efficiency
Avoid crystallising a disposal purely to meet a short-dated funding requirement.
Opportunistic capital
Hold dry powder against an existing portfolio to act on transactions with short execution windows.
Cash-flow smoothing
Bridge between contracted receipts, distributions or a scheduled refinancing.
Risks to weigh
Market risk is amplified
Borrowing against a portfolio increases sensitivity to price movement. A decline reduces the borrowing base and the balance at the same time.
Margin calls are time-bound
Cure periods are short by design. Borrowers should hold accessible liquidity outside the pledged portfolio before drawing.
Concentration is penalised
A portfolio dominated by a single issuer or sector will support materially less credit than its headline value suggests.
Currency mismatch
Where the facility currency differs from the portfolio, exchange movement affects coverage independently of asset performance.
Questions
- Do I keep economic ownership of the portfolio?
- Yes. Securities stay in your custody account. Income, corporate actions and voting rights remain yours, subject to the control arrangement.
- Can I trade within the pledged portfolio?
- Substitutions are permitted where the replacement holding is eligible and coverage is maintained. Sales that reduce coverage below the threshold require prior consent.
- What triggers a margin call?
- A fall in the borrowing base below the agreed coverage ratio, whether from price movement, currency movement, or a line becoming ineligible.
- Which custodians are acceptable?
- Regulated custodians in jurisdictions where security can be perfected and a control agreement executed. Where that is not possible, the facility does not proceed.
Discuss a securities-backed facility
Provide a custody statement and the intended use of proceeds, and we will return an indicative borrowing base.
Information on this page is provided for general information only. It does not constitute an offer of credit, a commitment to lend, or investment advice. Borrowing against securities involves risk of loss, including forced realisation of pledged assets. All facilities are subject to portfolio review, compliance clearance, credit approval and executed documentation.