Equity Release and Asset Monetization

Raising debt by taking advantage of one’s own assets, even fully amortized, is made possible by a fiducie. It allows to secure financing unprovided by banks with reduced tax frictions.

Solutions Fiducie:

bulletbecomes the owner of the assets and secures lenders,

bulletallocates (when applicable) income generated by the assets between borrowers and creditors,

bulletreturns assets to the settlors after full repayment of the debt,

bulletall the above transacting in a tax-neutral manner.

Protection of the lender

bulletStrength of the collateral trust, especially in the case of insolvency proceedings, owing to a convention de mise a disposition generating revenues allocated to the payment of the debt.

bulletControl of the assets and of their value through time.

bulletProtective LTV based on the quality of the assets and its cash flow generation.

Convenience for the borrower

bulletRetains the use of the property, including its availability for a potential sale (subject to the agreement from the lender)

bulletAccesses a new class of lenders, shouldering on the robustness of the fiducie, and secure financing that banks would have normally shunned.

bulletAvoids negative tax implications found in other asset-backed financings (e.g. sale & lease-back)

bulletMaintains accounting and tax treatment associated with the asset : depreciation & amortization, time allowance on capital gain, revenues,…

bulletPredefines, in agreement with the lender and the trustee, terms and conditions of the sale of the asset in case of default: price, time frame, buyers, exclusions…