It was recently my pleasure to assist with the refinancing of a €5 million property in France. The client was referred to me by their previous lender, who no longer had an appetite for French lending but wanted to ensure the transaction could continue smoothly.
The property was located in the Alpes-Maritimes, an area known for its attractive climate and peaceful surroundings. It had undergone extensive renovation since the original purchase, significantly increasing its value. With the works nearing completion, the client wanted to release equity and refinance onto an interest-only mortgage on competitive terms.
The client travelled extensively and had a highly international financial profile, including connections to a higher-risk jurisdiction. Their income was also received through several offshore entities, resulting in an irregular income pattern. Rather than receiving a consistent salary, the client typically drew income when large projects reached completion, some of which could take several years.
This meant the client was temporarily relatively illiquid. Establishing a new private banking relationship would normally involve placing assets under management (AUM), so finding a lender prepared to work with the client's circumstances was important. There was also a Luxembourg-based holding company within the wider structure, meaning the lender needed to be comfortable conducting the necessary due diligence.
OUR SOLUTION
After a detailed discussion with the client, I was able to build a clearer picture of their income, assets and wider financial position. This allowed me to present the circumstances to a suitable private bank and explain the expected liquidity event within the following year.
I supported the application with contract agreements involving the client's Japanese Special Purpose Vehicle (SPV) and the local government, alongside evidence of their established track record as an investor. This helped demonstrate that the temporary lack of liquidity did not reflect the client's wider financial position.
Fortunately, Enness has an excellent relationship with a local private bank whose lending criteria was particularly favourable for facilities below 50% loan to value (LTV). The bank also placed less emphasis on wealth management when assessing credit, which was particularly useful in this situation. This allowed us to significantly reduce the AUM requirement.
I arranged for the client to initially place €500,000 of AUM, with the potential to benefit from improved terms if a larger amount was subsequently placed. Ultimately, I negotiated a €2.75 million facility on an interest-only basis, providing the client with the equity release they required while maintaining flexibility around their wider wealth structure.
This case demonstrates the value of specialist international mortgage expertise when a borrower's income, assets and ownership structures span multiple jurisdictions. By understanding the wider circumstances and identifying a lender with an appropriate appetite, it was possible to create a structure suited to the client's requirements.
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, property suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances.
Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage or other borrowing secured against it. Property values can fall as well as rise.
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.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
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.
