Why Professional Investors Are Turning to Credit Linked Notes – And What That Means for Growing Businesses

Introduction

As base rates begin to stabilise but credit conditions remain selective, many growth-stage businesses are asking the same question: How do we raise capital without giving away equity or accepting venture debt on punishing terms?

Enter a sophisticated but increasingly accessible financing structure: the Credit Linked Note (CLN).

At Kingsbury & Partners, we use CLNs not just to serve investor appetite for yield—but to unlock meaningful capital for real-world businesses like Alt Lending, a specialist in the US private student loan space.

If you’re building a credit-led business or sitting on predictable, cash-generating assets, this could be the structure you’ve been looking for.

What Is a Credit Linked Note?

A Credit Linked Note (CLN) is a structured credit instrument that allows professional investors to earn a fixed return—often 8–12% per annum—based on the credit performance of an underlying asset or portfolio. If no credit event (such as a default or restructuring) occurs during the term, the investor receives regular interest payments and their principal back at maturity.

Traditionally used by banks and institutions to manage credit exposure, CLNs are now being adopted more widely as a capital-raising tool for specialist lenders and growth-stage businesses—and this is where Kingsbury & Partners comes in.

We recently structured and issued a Credit Linked Note on behalf of Alt Lending, a specialist US platform focused on acquiring, restructuring, and servicing distressed and delinquent private student loans. You can find out more about our partnership with Alt Lending here:

Here’s how it works:

• Alt Lending acquires underperforming private student loans at a discount.
• These loans are restructured with manageable 10-year repayment terms, often supported by co-signers.
• After 12 months of successful repayments (“seasoning”), the loans form a diversified, performing pool of assets.
• Kingsbury & Partners packages this pool as the reference asset in a Credit Linked Note, offered to professional investors.

This structure enables investors to access an asset-backed yield opportunity with fixed, predictable income—while providing Alt Lending with non-dilutive, scalable growth capital to continue expanding their loan book.

In effect, Kingsbury & Partners acts as the bridge between capital markets and credit-originating businesses, using CLNs to channel institutional funding into high-performing but underbanked sectors—without forcing founders to give up equity or take on high-cost venture debt.

Why It Matters for Businesses

If you’re a business with predictable, cash-generating assets—whether it’s recurring revenues, receivables, or contractual payments—CLNs can become a powerful financing vehicle.

Here’s how:

• Non-dilutive capital: Raise money without giving up equity.
• Lower cost of funding than venture debt or revenue-based financing.
• Tailored structures that match your cash flow profile, credit exposure, and investor appetite.
• Global investor access via listed or over-the-counter note issuance.

In other words, CLNs don’t just serve the investor. They serve the business looking for smarter capital.

The Kingsbury Difference

Kingsbury & Partners isn’t a fund or a family office—we’re, in some ways, the private capital market maker.

That means we work with both sides:

• Professional investors, seeking exposure to non-traditional credit with clear yield and governance.
• Growth-stage businesses, needing smarter capital to scale without losing control.

We design CLNs that work—for both the investor and the originator—governed by our internal Product & Risk Committee, backed by data, and aligned to real-world performance.