Real assets and shipping businesses borrow against collateral that either moves across jurisdictions or sits under a leasehold interest, which makes the enforceable security package narrower than the balance sheet suggests. Zenith structures and diligences facilities for vessel owners, leasing books and multi-site operators, with covenant packages built around utilisation rather than loan-to-value.
A flexible workspace operator running twelve sites looks like a real estate business. It isn't — it holds long leases and sells short occupancy, which is lease arbitrage. The lender's security is over an operating company and a set of leasehold interests, not over property, and enforcing it means stepping into leases rather than selling assets.
Shipping has the mirror problem: the asset is genuinely owned and genuinely valuable, but it moves between jurisdictions, and the enforceability of a mortgage depends on where the vessel happens to be. In both cases the headline asset base overstates the recovery.
Loan-to-value is close to meaningless in a leasehold business and only intermittently useful in shipping, where valuations swing with charter rates. The covenants that actually predict distress are operational: occupancy by site, utilisation by asset, charter coverage, weighted average lease expiry against the facility tenor.
A covenant package built on LTV will pass right up until the business fails. One built on utilisation gives both sides warning.
Before any credit decision, a lender learns most of what matters from how the borrower responds to the first structured information request. Group structure and intercompany flows. Financials disaggregated to site or asset level rather than consolidated into invisibility. The full lease or charter book with expiry and break profile. Unit economics per location or per vessel.
What a borrower can produce in two weeks — and in what form — says more about operational control than the audited accounts do.
Facilities secured on assets that move or sit under lease. Advance rates follow valuation methodology and charter or occupancy cover, not the sponsor's balance sheet.
Unitranche and second-lien against hard collateral, structured so the security package survives a leasehold, a flag change or a sale of the underlying asset.
Asset-level facilities against charters, leases and long-term utilisation contracts, with the residual-value assumption tested before a lender tests it.
Single-asset vehicles, co-invest sleeves and top-ups into existing structures — usually a faster route to capital than a successor fund for a sub-scale manager.
Asset-level reporting, covenant monitoring and cash management across owning entities, consolidated into one view a lender can read without a call.
Normalising earnings across owning entities, charters and management agreements, and reconciling asset values to the numbers in the accounts.
Equity for acquisition programmes, where the pipeline, the financing plan and the return maths need to be one document rather than three.
Debt diligence on a business whose asset base is entirely leasehold
Buy-side debt diligence on a multi-site flexible workspace operator — group structure, site-level unit economics, lease book, and pledgeable security
Security over an operating company and its leasehold interests, not over property, since the business itself typically holds long leases and sells short occupancy. Enforcement means stepping into leases rather than seizing or selling assets, which makes the recoverable value narrower than the headline site count or revenue implies. Covenant design should reflect this rather than a property-style loan-to-value approach.
Operational covenants rather than loan-to-value, which is close to meaningless in a leasehold structure: occupancy by site, weighted average lease expiry measured against the facility tenor, and site-level unit economics. These metrics give both borrower and lender early warning of distress, whereas an LTV-based covenant will typically hold right up until the business fails.
Around the asset's mobility and charter income rather than a static loan-to-value figure, since valuations swing with charter rates and the enforceability of a mortgage depends on the vessel's jurisdiction at any given time. Covenants are typically built on charter coverage and utilisation, and diligence focuses heavily on the charter book — coverage, expiry and break profile — alongside the security package.
Financials disaggregated to site or asset level rather than consolidated group figures, group structure and intercompany flows, the full lease or charter book with expiry and break dates, and unit economics per location or per vessel. How quickly and clearly a borrower can produce this in response to a first information request tells a lender more about operational control than audited accounts do.
Last reviewed August 2026
Tell us the transaction and the timetable. If it is not something we should run, we will say so.
