An internationally based high-net-worth individual approached Enness seeking to refinance a luxury villa in the South of France, release additional equity and establish a new private banking relationship. The client had extensive business interests and a diversified international property portfolio spanning several jurisdictions.
The property being refinanced was valued at approximately €13 million, with existing borrowing of around €4.2 million secured against it. The client wished to increase the borrowing to approximately €6.2 million, releasing additional capital to support a new business venture while seeking more suitable financing terms.
The transaction presented several structuring considerations. The client was prepared to establish a new assets under management (AUM) relationship, but some assets remained with the existing lender and could only be transferred once the existing facility had been refinanced. The new lender therefore needed to be comfortable with the AUM being established following completion rather than requiring all assets to be transferred in advance.
Enness approached a private banking lender experienced in international high-net-worth lending and complex property structures. The lender was able to consider the client’s wider financial position and accommodate the proposed timing of the AUM transfer, subject to its usual due diligence and lending criteria.
Several potential structures were considered, including different borrowing currencies, loan amounts and AUM arrangements. This provided flexibility around the overall financing structure and allowed the client to compare different approaches based on liquidity requirements, currency considerations and the wider private banking relationship.
The proposed financing included an interest-only structure secured against the French property, with AUM forming part of the wider banking relationship. Alternative structures were also explored, including a higher level of borrowing against the property and different currency options, subject to lender approval and the client’s individual circumstances.
The refinancing provided the client with access to additional capital while creating greater flexibility around the management of their international assets and banking arrangements. The structure also allowed the client to consider transferring assets from the existing lender without requiring the entire AUM position to be established before the refinancing could proceed.
This case demonstrates how specialist private banking relationships can provide greater flexibility for international high-net-worth clients with substantial property portfolios, cross-border assets and complex refinancing requirements. By considering the client’s wider balance sheet and future banking requirements, Enness was able to identify a range of potential structures rather than relying on a conventional mortgage approach.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, asset suitability, jurisdiction and lender criteria. Terms, rates, currency options, LTVs and AUM requirements may vary depending on individual circumstances and prevailing market conditions.
Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage or other borrowing secured against it. Currency movements may also affect the cost of borrowing where finance is denominated in a currency different from the borrower’s income or assets.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
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Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
