S&U plc (LON: SUS), the Solihull-based lender in non-prime motor finance and property bridging, has secured two securitisation facilities of up to £600m. Its shares were trading higher after the announcement, which came before the market opened this morning.
The shares were at 1,915p at 13:10 UK time, up 35p or 1.86% on yesterday’s close of 1,880p, in a day range of 1,885p to 1,945p. That is a delayed mid-session quote, not a close. It leaves them about 20% below the weekly-close high of 2,380p set in the week of the 2nd of February, and well above the low of 1,750p.
The facilities come from two Tier 1 UK financial institutions, which S&U has not named, and run for an initial three years. A securitisation facility is borrowing secured against a pool of loans. They replace in full the existing £330m of facilities, a club arrangement of lenders that was due for renewal in 2027, and S&U says the new terms carry improved interest rates.
The £600m is a ceiling, not debt already drawn. Motor finance business Advantage Finance gets up to £350m and property bridging arm Aspen Bridging up to £250m, roughly 1.8 times the previous capacity. Chief operating officer Jack Coombs said advance rates, the share of each loan lenders fund, have also improved. The debt is non-recourse for commercial risk, meaning lenders cannot claim against the wider group, and covenants reflect historic and forecast trading. Finance director Chris Freckelton said a revolving credit facility of up to £25m stays at Advantage for flexibility.
Chairman Anthony Coombs tied the funding to growth, describing the facilities as possibly the most transformative event at S&U for 20 years.
The Facilities open a vista of opportunities for sustainable, responsible growth in both our businesses, underpinning a targeted near-doubling of receivables by 2030 while driving an improving net interest margin.
Anthony Coombs, chairman of S&U
Receivables are the money customers owe S&U, and net interest margin is loan income minus funding costs. The company says the cheaper funding will only be used for lending that earns its historically high returns. More detail on the three-year plans is due with full-year results in April 2027.