£700k Lombard Loan Secured Against an Offshore Bond in Trust
This case explores how Enness Global arranged terms for a circa £700,000 Lombard loan secured against an offshore bond held within a trust, allowing the client to access capital for a property development project without selling the underlying investment.
Securities-backed lending is subject to lender assessment and is not suitable for everyone. Investment values can fall, potentially resulting in additional collateral requirements or the sale of pledged assets.
What Is Lombard Lending Against an Offshore Bond?
Lombard lending can provide liquidity against eligible investment assets without requiring the underlying portfolio to be sold. Enness Global works with high-net-worth and ultra-high-net-worth clients seeking specialist securities-backed lending where conventional borrowing may not suit the structure or the assets involved.
Why Did the Client Need a Lombard Loan?
The client was a UK national and UK resident seeking to raise circa £700,000 against an offshore bond held within a trust structure. The objective was to access capital for a property development project without selling the underlying bond.
The underlying portfolio had a value of approximately £2 million, creating a substantial asset base against which specialist lending could potentially be considered.
The requirement was therefore not simply to raise capital against an investment portfolio. The proposed facility also needed to work with the existing trust structure and the offshore bond without requiring a conventional sale of the underlying investment.
What Made the Offshore Bond More Complex to Finance?
The principal challenge was finding a lender prepared to recognise the offshore bond as security while working with the existing trust structure. The proposed arrangement also required an in-specie transfer, allowing the investment to be transferred without requiring the underlying bond to be sold.
The lender therefore needed to be comfortable with the nature of the asset, the trust structure, the proposed transfer and the ongoing management of the bond.
This made the transaction more specialist than a conventional Lombard facility secured against a straightforward investment portfolio.
How Was the Lombard Facility Structured?
Enness identified a lender able to consider the offshore bond and the surrounding trust structure as part of the security arrangement. The proposed structure allowed the bond to remain in place while being designed to provide the client with access to approximately £700,000 of capital.
An in-specie transfer formed part of the structure, avoiding the need for the underlying investment to be sold as part of the financing process. The facility was also structured on an open-term basis, subject to the lender's documentation, criteria and ongoing requirements. Pledging trust assets requires the trustees' agreement, and an in-specie transfer or pledge of an offshore bond may have tax and trust implications, so independent tax and legal advice should be taken.
The capital was intended to support the client's property development project while allowing the existing investment structure to remain in place.
What Was the Outcome for the Client?
The agreed terms were designed to provide the client with access to circa £700,000 of capital against an offshore bond with an approximate value of £2 million. The structure was expected to allow the underlying investment to remain in place while the client accessed liquidity for the planned property development.
The case demonstrates the additional structuring considerations that can arise when securities-backed lending involves offshore investments and trust arrangements. The ability to identify a lender with an appropriate appetite for the asset and structure was central to agreeing terms.
Why Can Specialist Lending Be Relevant for High-Net-Worth Clients?
High-net-worth clients can hold significant wealth in investment portfolios, trusts, offshore structures and other assets that do not always fit conventional lending criteria. Specialist securities-backed lending can provide another potential source of liquidity where an eligible asset can be used as security without requiring an immediate disposal.
Enness Global works with a wide range of lenders and arranges financing for high-net-worth and ultra-high-net-worth clients with complex requirements. The appropriate lender and structure depend on the assets involved, ownership arrangements, borrowing purpose and lender criteria.
What Were the Risks and What Could Have Gone Differently?
The proposed facility remained subject to lender assessment, documentation, asset valuation and approval. Another lender may have taken a different view of the offshore bond, trust structure or proposed in-specie transfer.
Securities-backed lending also carries risks because the value of the underlying assets can change. A fall in asset value could affect the lender's security position and may result in additional requirements under the facility, depending on its terms, including a margin call or the sale of pledged assets.
The availability and amount of finance are not guaranteed, and the same structure or facility size may not be available to another borrower. Any lending arrangement will remain subject to lender criteria, documentation and individual circumstances. Interest and fees apply, and an open-term facility can be reviewed by the lender under the terms of the facility.
Important Information
This case study is provided for illustrative and informational purposes only and does not constitute financial, investment, tax or legal advice. The client scenario has been anonymised and certain details have been generalised to protect confidentiality.
Loan amounts, asset values, facility structures and other terms are specific to the circumstances of this case and should not be taken as indicative of terms available to other borrowers. Securities-backed lending is highly specialised and subject to lender criteria, asset valuation, due diligence, documentation and approval.
The value of investments can fall as well as rise. A fall in the value of assets provided as security may result in additional requirements from the lender and, depending on the facility, the potential sale of pledged assets.
Enness Global acts as a broker and not as a lender. Certain investment-related and international lending activities may fall outside the scope of UK financial regulation.
We do not provide investment, tax or legal advice. Borrowers should obtain appropriate independent professional advice before entering into a securities-backed lending arrangement.
Enness Global is a trading name of Enness Limited, a credit broker, not a lender. Enness Limited is authorised and regulated by the Financial Conduct Authority (FCA reference 565120).
Related Case Studies
See how Enness structures finance for offshore, commercial and high-value transactions.
View all
Frequently asked questions
Expert answers from our specialist brokers to the questions we are asked most often.
Let's talk nowCan an Offshore Bond Be Used as Security for a Lombard Loan?
Potentially. Some specialist lenders may consider eligible offshore bonds as security, depending on the investment, ownership structure, jurisdiction, valuation and lender criteria.
