Selecting a Lender: What Discretion Really Means

A securities-backed loan against a significant shareholding is not a routine banking transaction. The borrower is typically a founder, a major shareholder, or a family office — parties for whom the mere fact of borrowing against a holding can carry market, reputational, or regulatory implications. Disclosure that a significant shareholder has pledged shares may move a stock price, invite regulatory scrutiny, or signal to business partners that the shareholder’s financial position has changed. In some cases it can trigger change-of-control provisions in commercial contracts. The stakes around confidentiality are therefore substantially higher than in a standard corporate lending context, and borrowers are entitled to ask precise questions about how a prospective lender actually handles sensitive information.

Discretion extends to third parties. Some lenders in this market use brokers, sub-custodians, or syndication partners as a matter of course, meaning that details of a borrower’s position pass through multiple organisations before the loan is completed. Black Haven acts as principal on every transaction — it is the lender, not an arranger or introducer — and does not syndicate positions or share borrower information with external parties. Where third parties such as legal counsel or custodians are necessarily involved, Black Haven ensures those parties are bound by appropriate confidentiality obligations before receiving any deal information.

The legal framework governing the facility agreement matters for discretion as well as for credit. Facilities governed by English law or the laws of well-regarded offshore jurisdictions provide clear, predictable enforcement mechanisms and well-developed confidentiality protections. Black Haven documents its facilities under established legal frameworks — typically English law or Bahamian law — and selects custodians in jurisdictions with strong regulatory oversight. Borrowers should confirm that the governing law of any proposed facility is one in which they and their advisers are comfortable, and that the lender’s domicile does not expose the transaction to regulatory regimes with broad information-sharing obligations.