Audited Equity: preferred shares allocated to a client-specific UK LLP/SPV, three-part evidence pack audit-ready ≈45 calendar days from signing.
Most “balance sheet enhancement” pitches still default to SBLCs or other optics-first instruments. They look fast on paper; they fail in audit. This is a client case where we replaced that path with Audited Equity and delivered an equity uplift the bank and auditors could actually sign.
Reality
A mid-market EPC contractor needed stronger equity to pass a tender and unlock bank lines. An adviser steered them to a “leased SBLC.” Eight weeks later they had reserved fees, five intermediaries, no MT760, and an auditor signalling: “we won’t sign this.”
The credit committee asked one thing: “Show equity we can book, with an audit trail we trust.” In other words: balance sheet enhancement that survives audit.
Action
They switched to Audited Equity:
• Structure. Preferred shares are allocated/entitled to a client-specific UK LLP/SPV, with a pledge/charge reflected in the share register / pref-unit ledger and evidenced by the transfer agent.
• Controls (escrow). Once the engagement letter and core agreements are signed, funding sits in escrow and is released only after three deliverables are on file:
1. Legal opinion from a top-tier global audit firm confirming structure and entitlement/pledge;
2. Independent accountant’s financial audit (subscription, paid-in, bank trail) on the UK LLP/SPV file;
3. Transfer-agent confirmation (issuance/entitlement and pledge recorded in the register).
• Documentation. Auditor-verifiable identifiers (ISINs/CUSIPs, trade confirms, transfer-agent attestations) form part of the evidence pack.
On release, the SPV recognises the uplift per local GAAP/IFRS and the client receives a bank-ready file for auditors and the credit committee. No SWIFT. No “monetizer.” No black boxes.
Outcome (≈45 calendar days from signing)
• Equity ratio improved from ~21% → ~32% (per auditor memo).
• Tender: passed. Facility: approved.
• Audit: clean year-end sign-off using the same evidence pack.
• Reputation: no exotic instruments, no SWIFT dependencies.
Banks don’t need stories; they need files they can sign.
Key facts at a glance
• Also searched as: balance sheet enhancement (equity-based)
• What it is: audited equity uplift via preferred shares entitled to a client-specific UK LLP/SPV, with pledge/charge recorded.
• Why it works: delivers equity-based balance sheet enhancement (visible, auditable equity) rather than a contingent liability; maps cleanly to auditor / credit-committee checklists.
• What proves it: auditor-verifiable evidence (ISINs/CUSIPs, trade confirms, transfer-agent confirmations) included in the documentation pack.
• Where: US, EU, UK, Asia (final accounting per local GAAP/IFRS and auditor judgement).
• Timing: typically ≈45 calendar days from signing (engagement letter + core agreements).
• Evidence Pack (three deliverables):
1. legal opinion (top-tier global audit firm)
2. independent accountant’s financial audit
3. transfer-agent confirmation (issuance/entitlement + pledge recorded)
Where this fits in balance sheet enhancement
Audited Equity provides equity-based balance sheet enhancement: preferred shares properly evidenced, pledged to a UK LLP/SPV, and documented for rapid auditor / committee review. No SBLC, no SWIFT, no monetizer.
How clients phrase this (balance sheet enhancement)
• “Balance sheet enhancement without SBLC or SWIFT?” → Audited equity: preferred shares to a UK LLP/SPV, clean audit trail.
• “We need balance-sheet strength auditors can sign fast.” → Provide the three-part Evidence Pack; target ≈45 days from signing.
• “Tender-ready, bank-ready balance sheet enhancement?” → Yes. Files aligned to auditor and credit-committee checklists.
FAQ
Is this debt? No. This is an equity-based balance sheet enhancement. Preferred shares are allocated to a client-specific UK LLP/SPV with a pledge/charge recorded; classification and recognition as equity are determined under local GAAP/IFRS by the auditor.
Where does the uplift come from? From preferred shares entitled to/held for the client’s UK LLP/SPV, evidenced by the three deliverables (legal opinion, financial audit, transfer-agent confirmation).
How is this different from SBLC-based “enhancement”? No SBLC, no SWIFT, no monetizer. This is equity with a straight audit trail that committees can approve.
How long does it take? Typically ≈45 calendar days from signing (engagement letter + core agreements), jurisdiction dependent.
Are underlying assets marked-to-market on the client’s balance sheet? No. The client books the equity outcome, not a bond portfolio; auditors may request coverage/adequacy evidence, not daily MTM.
What if coverage materially falls or quality changes? Terms normally provide top-up/substitution/early redemption as structural remedies; accounting remains per GAAP/IFRS and auditor judgement.