Wholesale Funding Update

RNS Number : 3790E

Distribution Finance Cap. Hldgs PLC

05 November 2020

 

5 November 2020

Distribution Finance Capital Holdings plc

("DF Capital" or the "Company" together with its subsidiaries the "Group")

Wholesale Funding Update

Distribution Finance Capital Holdings plc, a newly authorised bank providing personal savings products and working capital solutions to dealers and manufacturers across the UK, announces that it has agreed with its senior and senior mezzanine lenders, Citibank and funds affiliated with Ares Management Corporation ("Ares"), the repayment of its current wholesale funding facility (the "Facility") on 17 November 2020, in line with the terms of the Facility.

The outstanding Facility balance is expected to be approximately £30m, before any contractual customer loan repayments to 17 November 2020 are deducted. Following this final repayment, the Group's loan book will be funded by the recently announced range of savings products which have seen strong demand since launch on 14 October 2020, with deposits now exceeding £90m.

Additionally, Ares has noted to the Group that, in line with the contractual terms agreed with the Company at the signing of the mezzanine Facility in June 2019, Ares has a right of first refusal until June 2022 in respect of the on-going provision of wholesale funding, should it be required. The Group has considered the relative merits of any diversification of funding in light of this, together with the Group's application to participate in the British Business Bank's ("BBB") ENABLE Funding scheme. Accordingly, the Group has determined that, at this stage of its development and in light of the heightened demand for personal savings products and the success of its deposit raising activities,  the Group intends to focus its near-term funding strategy on the raising of low-cost retail deposits. In discussions with BBB, the Group has decided to place its ENABLE Funding application on hold and will consider any alternative or diversification of funding in line with its regulatory liquidity planning processes.

Carl D'Ammassa, Chief Executive of the Group commented: "This is another significant milestone for the bank. The demand for our personal savings products has exceeded our expectations and accordingly has allowed us to repay all wholesale funding ahead of the facility maturity date in December 2020, whilst also ensuring we can provide working capital solutions to dealers and manufacturers throughout the latest lockdown. Despite the uncertainty caused by the pandemic, we feel in a strong position to support the needs of our borrowers with a single channel of funding and will consider any diversification strategy on an on-going basis. Our savings products are resonating with depositors and we believe this will prove to be a resilient and low-cost primary funding source for us as we look in to 2021 and beyond."

For further information contact:

Distribution Finance Capital Holdings plc
Carl D'Ammassa - Chief Executive Officer	[phone]
Kam Bansil - Head of Investor Relations	[phone]
http://www.dfcapital-investors.com
Investec Bank plc (Nomad and Broker)	[phone]
David Anderson Bruce Garrow Duncan Wilson Maria Gomez de Olea
Blue Pool Communications (Financial PR)
Nick Lord		[phone]

 

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