The Bank can provide different types of credit facilities (such as overdrafts, loans and derivatives) against the security of a charge over your liquid assets (cash, equities, bonds and funds) held with the Bank. The Bank will apply a discount to the market value of your liquid assets, to calculate what we call the collateral value (CV) for our lending purposes. The Bank operates on the principle that the aggregate CV of any assets held must, at all times, be equal to or greater than the drawn credit facilities, to ensure that at all times the drawn credit facility is secured.
CVs are determined according to a number of factors including the risk associated with an asset. In general terms, the higher the risk associated with an asset, the lower its CV for the purpose of securing the borrowing.
In the right circumstances, borrowing against the value of your liquid assets can offer a fast, flexible solution to meeting your cash flow needs. Borrowing against liquid assets offers you access to finance without having to sell your investments in order to get access to cash. Lombard facilities can offer you a cash management solution without having to amend your long-term investment strategy.
Facilities are typically revolving, meaning that amounts repaid can be re-drawn and you only pay interest on drawn amounts.
Lombard lending is not without risk and potentially you could lose part or all of your investment.See links to the right for further information about key risks.
The Bank will consider a number of factors when making a Lombard facility available, including the purpose of the loan, your investment knowledge and experience, the type of assets you hold and your wider financial position in the event that you take up a Lombard facility with TNB.
Although Lombard facilities can allow you to gear (leverage) your investment, improve returns and diversify your portfolio, please note that this strategy is not suitable for everyone. No investments are risk-free.
These guidelines contain the Trusted Novus Bank Limited (the Bank) rules applicable to the gearing and investment of assets placed as collateral for lending Facilities with the Bank.