- Client: International high-net-worth client with USD income
- Challenge: Cross-border financing for acquisition and redevelopment in Switzerland
- Loan Amount: Bespoke mortgage facility supporting circa 60% loan-to-value acquisition and redevelopment funding
An international high-net-worth client approached Enness seeking finance for the acquisition of a residential property in Switzerland. The client intended to acquire the property and undertake a substantial redevelopment project. The objective was to secure financing that could support both the acquisition and redevelopment while aligning with broader financial and tax planning objectives.
The transaction involved multiple layers of complexity. The client earned income in US dollars, held substantial liquid assets and required borrowing secured against a Swiss asset in Swiss francs. Swiss franc-denominated debt was preferred due to the cost of borrowing relative to alternative currencies, alongside wider tax and wealth planning considerations.
Cross-border transactions of this nature require specialist lender consideration. The case involved international income, foreign currency borrowing, property acquisition and a major redevelopment strategy, all of which reduced the pool of lenders able to consider the transaction. Redevelopment requirements also introduced additional considerations when assessing the overall financing structure.
Enness identified a specialist lender capable of assessing the client's financial position, liquidity profile and proposed property strategy. A multi-stage financing structure was arranged, allowing the lender to support both the acquisition and redevelopment funding requirements under a single facility.
The financing was structured to support both the redevelopment phase and the client's longer-term financing objectives, providing a funding strategy covering the acquisition through to completion of the redevelopment.
This case highlights the importance of specialist structuring in international property finance. Where multiple jurisdictions, currencies and redevelopment requirements intersect, lender selection and careful structuring can be important considerations when arranging finance.
FOREIGN CURRENCY BORROWING CARRIES EXCHANGE RATE RISK. MOVEMENTS BETWEEN CURRENCIES MAY AFFECT THE COST OF REPAYMENT AND THE OVERALL COST OF BORROWING.
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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.
