€16M Monégasque Villa Remortgage for Foreign National

• Client: International client introduced by a Monaco-based wealth management company
• Property: Monaco villa valued at €16 million
• Challenge: Required a substantial refinance while managing a politically exposed profile and retaining the existing ownership structure
• Finance: €11 million interest-only refinance, with €5 million held under assets under management (AUM), on a five-year tracker at 1.75% above LIBOR

International property refinancing can become particularly complex where a high-value asset is held through an existing ownership structure and the borrower has a politically exposed profile. Enness was introduced to an international client by a wealth management company based in Monaco who was looking to refinance a substantial loan secured against a villa in Monaco.

The property was valued at approximately €16 million, and the client required €11 million of refinancing. The existing loan was held in the name of the client’s partner, who had no personal income. The client therefore wanted to provide a personal guarantee for the new facility while ensuring that the property remained in the existing ownership structure once the previous financing arrangement came to an end.

The client’s politically exposed status presented an additional consideration during the lender selection and compliance process. Given the nature of the client’s profile and wealth, confidentiality and discretion were particularly important throughout the transaction.

As with any transaction involving a politically exposed person, the lender needed to undertake appropriate due diligence and understand the client’s financial circumstances and source of wealth. In this instance, the client was willing to provide the necessary information, allowing the application to progress through the relevant compliance procedures.

Enness approached multiple lenders before identifying a lender comfortable with the client’s profile and the proposed structure. The existing relationship between Enness and the lender, combined with the overall strength of the client’s financial position, helped facilitate discussions around the required funding.

The lender agreed to provide a structure equivalent to 100% of the property value when considering the €11 million refinance alongside €5 million of the client’s assets held under management. This enabled the client to refinance the existing borrowing while establishing an AUM relationship with the lending institution.

Enness secured an interest-only facility of €11 million on a five-year tracker product at a rate of 1.75% above LIBOR at the time. The structure allowed the client to maintain the existing ownership arrangement while providing the required personal guarantee.

The case demonstrates the importance of identifying a lender with the appropriate appetite for complex international transactions. High-value property, politically exposed profiles, existing ownership structures and substantial refinancing requirements can all affect lender appetite and the level of due diligence required.

For clients looking to refinance high-value property in Monaco, specialist Monaco mortgage expertise can help identify lenders able to consider complex international circumstances and bespoke financing structures, subject to individual lender criteria.

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, affordability, valuation, property suitability, security and lender criteria. Terms, rates, LTVs, fees and availability may vary depending on individual circumstances.

Risk Warning:
Property values can fall as well as rise, and you may not get back the amount originally invested. Property securing finance may be repossessed if repayments are not maintained. International property finance can also involve risks associated with currency movements, refinancing conditions, changes in property values and the ability to service borrowing.