Equity Release from a Property in Monaco

• Client: HNW individual
• Property: Monaco apartment valued at €14m
• Requirement: Refinance existing loan and release additional equity
• Facility: Two-tranche bridging loan
• Interest Rate: 0.75% PCM
• Arrangement Fee: 20 bps discount negotiated

Enness Global was approached by a high-net-worth client who owned an apartment in Monaco valued at approximately €14 million. The client needed to refinance an existing loan secured against the property while also releasing additional equity. Speed was a key consideration, with the client looking to access the capital quickly and maximise the amount that could be released. The financing also needed to provide a clear route to refinancing within 12 months.

Given the short timeframe and the requirement to release additional capital, a bridging facility provided the flexibility needed. However, the exit strategy was equally important. Rather than arranging a bridge without considering how the facility would ultimately be repaid, Enness structured the financing around the client’s intended transition to a longer-term mortgage.

Enness identified a lender that could provide the finance in two tranches. The first tranche provided the immediate capital required by the client, while a second tranche could be released after 12 months. This additional tranche was designed to provide the assets under management (AUM) required to establish a new banking relationship and refinance the bridging facility onto a traditional mortgage.

The structure was carefully considered to ensure that the combined borrowing remained within the maximum loan-to-value available from the proposed long-term lender. This meant the client could transition from the bridging facility without needing to contribute additional personal funds when refinancing, subject to the agreed lending terms and future underwriting.

Enness also considered the practical costs associated with the eventual refinance. The new mortgage was structured to be transferable to the new lender, helping the client avoid additional notary costs that could otherwise arise during the refinancing process. Affordability was also assessed carefully, including the principal, interest and other costs associated with the bridging facility.

Pricing was another important consideration. While international bridging finance can often be priced around 1% per month, Enness negotiated a more competitive rate of 0.75% per month, alongside a further 20 basis point reduction in the arrangement fee.

This case demonstrates the importance of considering the exit strategy from the outset when arranging international bridging finance. By structuring the facility around the client’s longer-term refinancing plans, Enness was able to provide immediate liquidity while creating a clear pathway towards a traditional mortgage.

For clients requiring short-term finance against high-value international property, the right structure can be just as important as the initial rate. Enness can assess the wider financing requirements, identify suitable lenders and structure the facility with the intended exit in mind. To discuss your requirements, speak to a mortgage specialist.

Risk Warning:
Bridging finance carries risks. If you do not meet the terms of the facility, the lender may take enforcement action against the property used as security. Property values can fall, refinancing may not be available on the expected terms, and a clear and realistic exit strategy is essential when considering short-term borrowing.

Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, underwriting, property assessment and lender criteria. Terms and availability will vary depending on individual circumstances. Enness does not provide investment advice and lender introductions are unregulated.