PassyPartners
Compared

Lombard loan vs
property-backed finance

One is secured on your securities portfolio, the other on the building. Both come up in Monaco private banking, and they are not interchangeable.

Side by side
Secured on
LombardA pledged portfolio of securities, funds or cash held with the bank
Property-backedA charge over the real estate itself
Provided by
LombardPrivate banks, normally alongside an existing assets-under-management relationship
Property-backedSpecialist real estate lenders, debt funds, family offices and private banks
Sized against
LombardAn advance rate applied to the pledged assets, varying by asset quality, concentration and currency
Property-backedThe value of the property (loan-to-value)
Typical term
LombardOften uncommitted and repayable on demand, rolled or revolving rather than fixed
Property-backedA committed facility, typically 3 to 24 months for a bridge
Principal risk
LombardA fall in portfolio value triggers a margin call, and the bank can sell the pledged assets
Property-backedExit risk: the facility must be refinanced or repaid at maturity
Common use
LombardRaising liquidity without selling positions, or realising a capital gain
Property-backedAcquisition under time pressure, releasing equity, refinancing maturing debt
Does Passy Partners arrange this
LombardNo. This is a private banking product, not a real estate facility
Property-backedYes. This is what we do

Structural characteristics only. Terms on any facility are set by the chosen lender and confirmed on completion of underwriting.

Where we sit, and where we do not

Passy Partners does not arrange Lombard facilities. A Lombard line belongs to a banking relationship: it is priced off the portfolio, documented by the bank that holds it, and it is not a real estate instrument. We say so plainly because the distinction matters more than it first appears.

The consequence people underestimate is what happens when markets move. Debt secured on a portfolio is repayable when that portfolio falls, whatever the property is doing. A borrower who has funded a building through a Lombard line can face a demand for collateral at precisely the moment liquidity is hardest to find. Debt secured on the building does not behave that way.

What we do is arrange the property-secured side: a first charge over the asset, a committed term, and a lender chosen for the jurisdiction and the profile rather than for the portfolio you happen to hold with them. In Monaco that is frequently a private bank; elsewhere it is as often a debt fund or a specialist lender.

See also bridge and development finance in Monaco and bridge loans for Monaco property.

Frequently asked

Lombard and property debt,
answered.

A Lombard loan is a credit facility secured on a pledged portfolio of liquid assets, typically listed securities, funds or cash held with the lending bank. The borrower keeps ownership of the portfolio and continues to receive its income, but the bank takes a pledge over it and can sell the assets if their value falls below an agreed threshold. It is a private banking product rather than a real estate product: the security is the portfolio, not the property. Passy Partners does not arrange Lombard facilities. We arrange finance secured on real estate.

Weighing a portfolio line against property debt?

Send a short brief. We will tell you candidly which one your transaction needs, including when the answer is your own bank.

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