How Lombard lending works in Singapore private banking—LTVs, eligible collateral, haircuts, and when portfolio credit is smarter than selling assets.
A Lombard facility collateralised by your securities provides flexible liquidity for tax payments, real-estate bridges, or opportunistic investments—without triggering sales.
1) What banks typically accept
- Highly liquid bonds/blue-chip equities/UCITS funds: core collateral.
- Alternatives/PE funds: lower or zero LTV; often excluded.
- Single stocks with volatility: tighter LTV and dynamic haircuts.
2) Indicative LTV bands (illustrative)
- Government bonds / IG bond funds: 60–80%
- Investment-grade diversified funds/ETFs: 50–65%
- Blue-chip equities / equity ETFs: 40–60%
- Concentrated/small-cap equities: 20–40% Banks adjust LTVs with market conditions; always get current term sheets.
3) Pricing & structure
- Rate: reference (e.g., SORA/SOFR) + spread tied to AUM/quality.
- Covenants: top-up clauses, margin call thresholds, concentration limits.
- Use cases: property completion bridge; monetise embedded gains without selling; tactical buys in sell-offs.
4) Risk you must underwrite
- Gap risk: fast drops cause immediate calls.
- Concentration: single-name exposure accelerates volatility.
- Cross-currency: borrowing in one currency against assets in another invites FX risk.
5) A simple decision framework
- If need < 12 months and collateral is liquid → Lombard often efficient.
- If cash need is long-dated → consider partial asset sale or term credit.
- Simulate a stress 25–35% drawdown to ensure you can meet calls.
Lombard loan Singapore, portfolio financing, LTV by asset class, margin risk, liquidity planning, credit solutions
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Disclaimer:The BankOpen Singapore Editorial Team consists of financial analysts, banking industry professionals, and experienced writers. We are dedicated to providing accurate, up-to-date, and practical insights to help readers navigate Singapore’s banking landscape and make informed financial decisions. The information provided in this article is for general informational purposes only and does not constitute financial, investment, or legal advice. Always consult with a qualified professional before making any banking or investment decisions.