Swiss art-backed credit note targets CHF 100m launch - Trade Treasury Payments

A Swiss asset-backed securities (ABS) note secured against blue-chip art loans is preparing to raise CHF 100 million in its initial offering, with scope to expand the facility to CHF 250 million.

The seven-year, Swiss franc-denominated senior debt note will be issued by ArtSecure Capital and managed by ArtSecure Lending, a newly created special purpose vehicle. It offers investors 2.5% plus SARON, with interest paid semi-annually.

Collateral will comprise a diversified portfolio of blue-chip artworks, each valued above $500,000, appraised by independent experts, and financed at a maximum 50% loan-to-value. ArtSecure Capital’s board will include external art market specialists and credit professionals.

Zurich-based asset manager Finanz Konzept structured the note and will act as placement agent. Xeno Marugg, its head of corporate finance, said the raise is aimed at Swiss pension funds, family offices, insurers, and private banks, as well as international ABS funds seeking diversification into alternative assets and currencies.

Global art sales reached $65 billion in 2023, with the wider art and collectables market estimated at $1.7 trillion, according to Finanz Konzept. Art prices show low correlation with traditional asset classes and are less sensitive to economic cycles.

The structure includes an interest reserve account covering one year of payments, with quarterly auction cycles at major houses available to liquidate collateral if required. Finanz Konzept is targeting minimum loans of $5 million from global collections and has already engaged with prospective borrowers expressing interest in the programme.