Litigation Capital Management Limited (LON:LIT) has secured a US$50mln credit facility to provide the company with additional investment capital.
The facility is with Northleaf, a global private markets investment firm that has experience in the litigation finance sector.
The facility runs for four years and carries a coupon of 8% with a profit participation element calculated by reference to the profitability of Litigation Capital’s (LCM) direct investments. The overall cost of the facility is capped at 13% per annum.
"The securing of this credit facility is a hugely significant development in LCM's growth. The credit facility, together with LCM's existing resources, provides LCM with flexible capital structure for the foreseeable future to meet our most conservative assessment of the expected demand for LCM's litigation finance needs, as well as LCM's GAR Fund co-funding obligations, including any anticipated potential upsizing," said Patrick Moloney, chief executive of LCM.
Jonathan Moulds, the company’s chairman, said the company was delighted to partner with Northleaf, which has “deep expertise in litigation funding”.
He said LCM is witnessing an uplift in litigation finance applications as a result of a number of factors including the extraordinary uncertainty facing global economies.
“These conditions, combined with the flexibility [of] the credit facility, provides LCM with an excellent opportunity to accelerate growth,” Moulds said.