S&U (LSE:SUS) announced it has signed two new securitisation facilities worth up to £600m with two Tier 1 UK financial institutions, replacing the group's existing £330m club facility that was due for renewal in 2027.
The London-listed specialist lender, which provides motor finance to non-prime borrowers through its Advantage Finance division and property bridging loans through Aspen Bridging, said the new facilities come at improved rates and advance rates.
Advantage will receive £350m of funding under the new arrangement, with a further £250m available for Aspen.
The deal formalises the securitisation process S&U first flagged in its trading statement in May, when it said terms had been agreed and legal work would begin to support a target of roughly 20% annual net receivables growth that management estimated would require an additional £300m of funding.
At its interim results, reported in September, the group had substantially concluded the legal process on the facility, with formal signing and drawdown expected in October; group net receivables had already climbed 26.8% to a record £541m at that stage, funded by net borrowings of £285.1m and gearing of 114%.
Chairman Anthony Coombs called the facilities "possibly the most transformative event at S&U for 20 years", saying they underpin a targeted near-doubling of receivables by 2030 while improving net interest margin.
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Meanwhile, chief operating officer Jack Coombs said the facilities are non-recourse for commercial risk, with covenants and credit parameters reflecting both historic and forecast trading.
Group finance director Chris Freckelton said the Advantage facility will be hedged by a balance guaranteed swap as receivables are pledged, and that a small revolving credit facility of up to £25m will remain in place at Advantage for additional flexibility.
