Private Wealth Management - Debt Facilities Advisory

The core service covers assessing whether debt is the right tool for a specific wealth objective, comparing facility terms across private banks and UAE lenders, reviewing collateral suitability and loan-to-value risk, independently reviewing facility documentation before signing, and — once a facility is in place — ongoing monitoring of loan-to-value and margin thresholds plus periodic renewal and refinancing review. For clients with India-linked assets, it also covers cross-border structuring considerations coordinated with PNPC's India offices.

No. PNPC does not lend money and does not earn commission, referral fees, or any payment from any bank or lender based on a facility being arranged or its size. Our fee is a transparent advisory fee agreed with the client in writing, independent of whether — or how much — the client ultimately borrows. This is a deliberate structural choice so that our recommendation is never influenced by an incentive to encourage more borrowing.

A Lombard facility (also called securities-backed lending) is a loan secured against an investment portfolio — shares, bonds, or funds — typically held with a private bank, allowing a client to access liquidity without selling the underlying investments. A mortgage, by contrast, is secured against real property. Both are forms of asset-backed lending, but they carry different risk profiles: a Lombard facility is exposed to market volatility and can trigger a margin call if the portfolio value declines below the agreed loan-to-value threshold, while a mortgage's risk is tied to property market movement and is typically assessed and called far less frequently.

A margin call occurs when the value of the collateral securing a facility — typically an investment portfolio — falls to a level where the loan-to-value ratio breaches the threshold set in the facility agreement, requiring the client to post additional collateral or repay part of the facility, often within a short timeframe set by the bank. We model this scenario before a client signs a securities-backed facility, showing the specific portfolio decline that would trigger a call at the proposed loan-to-value ratio, and we monitor the portfolio against that threshold on an ongoing basis so a call is anticipated well before the bank's own notice arrives.

Borrowing against an appreciating or income-generating portfolio, rather than selling part of it, can preserve continued market exposure and future growth potential, avoid crystallising a disposal at a time that may not be optimal, and provide liquidity for an opportunity (a property purchase, a business investment) without disrupting a long-term investment strategy. This is not universally the right choice — it depends on the interest cost of the facility relative to the expected return on the retained portfolio, the client's risk tolerance for margin call exposure, and the specific purpose the liquidity is needed for. We assess this trade-off explicitly rather than assuming leverage is automatically the better option.

We look beyond the lender's advertised maximum loan-to-value and assess the practical, stressed loan-to-value for the specific asset involved — factoring in the asset's historical volatility, concentration (a single-stock position carries materially more risk than a diversified portfolio), and the client's realistic capacity to post additional collateral or repay quickly if a margin call occurs. A loan-to-value ratio a bank is willing to offer is not automatically the loan-to-value ratio that is prudent for that specific client and asset.

Yes. We review proposed mortgage or property finance terms for UAE property — including how the facility interacts with UAE Central Bank mortgage loan-to-value caps applicable to residents and non-residents, Dubai Land Department (or equivalent emirate-level authority) registration requirements for the mortgage, and how the property financing fits within the client's broader leverage and wealth position, rather than treating the mortgage as an isolated transaction.

The UAE Central Bank sets loan-to-value caps for mortgage lending by regulated UAE banks, with different maximum ratios depending on factors including whether the borrower is a UAE national or expatriate/non-resident, whether the property is a first purchase, and the property's value band. These caps are set at the regulatory level and apply to banks operating in the UAE; the specific applicable ratio for a given client depends on their residency status and the property in question, which we confirm against current bank policy at the time of the engagement rather than relying on a fixed figure that may have changed.

Yes, this is one of the most valuable parts of the engagement. We help clients approach more than one private bank or UAE lender for indicative terms, and compare the proposals on a consistent basis — interest margin over the reference rate, arrangement fees, tenor, prepayment penalties, and any cross-collateralisation or negative pledge requirements — so the client is choosing between genuinely comparable offers rather than accepting the first proposal from an existing relationship bank by default.

Cross-collateralisation is a clause in some facility agreements that allows a lender to treat other assets the client holds with that same bank — beyond the specific asset pledged for this facility — as additional security, or that ties the client's other banking relationships with that institution to the facility's terms. This can mean that a problem with one facility (a margin call, a covenant breach) exposes assets the client did not intend to pledge for that specific borrowing.

Debt strategy is rarely a standalone decision — it interacts directly with a client's equity portfolio (as potential collateral or as an alternative to a facility), real estate holdings (as both a financed asset and potential security), and alternative investments (which affect overall liquidity and risk profile). We coordinate debt facilities advisory with these other wealth advisory workstreams so that leverage decisions are made with full visibility of the client's total asset and liability position, not assessed in isolation.

Both, and often the two need to be considered together. For a family-owned UAE business, we help assess expansion or working capital debt not only on its own commercial merits but also on how it interacts with the owning family's personal balance sheet and overall leverage — since a personal guarantee or cross-collateralisation is common in family business lending and can expose personal wealth to business-level risk if not structured carefully.

It becomes relevant whenever a client's assets, income, or intended use of loan proceeds span both UAE and India — for example, a UAE resident wanting to borrow against a UAE portfolio to fund an Indian property purchase, or an Indian resident wanting to leverage Indian assets to support UAE business or property activity. We coordinate with PNPC's India offices in Chennai, Bangalore, and Hyderabad to ensure FEMA borrowing and remittance rules, currency exposure between AED/USD and INR, and NRE/NRO account mechanics are considered together with the UAE-side facility, rather than by two disconnected advisors on either side of the border.

A negative pledge clause restricts the borrower from creating further security over specified assets — including assets not directly pledged to this particular lender — without that lender's consent. This can materially limit a client's flexibility to raise additional facilities or offer other assets as collateral elsewhere in the future, and it is easy to overlook in the detail of a facility letter if the document is not reviewed with this specific question in mind.

Yes, though the engagement looks different — the focus shifts to assessing the client's realistic options (additional collateral, partial repayment, restructuring, or negotiated forbearance with the lender) and helping the client approach the lender from a position of a clear, credible plan rather than an unstructured, reactive conversation. We are candid that distressed situations have fewer good options the later they are addressed, and we encourage clients to engage early rather than waiting until a formal default notice.

Most private bank and commercial facilities in the UAE are priced with reference to a floating base rate (commonly tied to EIBOR or an equivalent benchmark) plus a margin, meaning the client's actual interest cost moves with broader rate conditions unless the facility has a fixed-rate or capped structure. As part of ongoing facility monitoring, we track whether a client's facility terms remain competitive as rates move, and flag when refinancing, a fixed-rate conversion, or renegotiation may be worth pursuing.

UAE banks apply Central Bank-aligned AML/CFT and KYC requirements that require clients to evidence the origin of funds being used for a transaction (source of funds) and, for larger or higher-risk relationships, the origin of the client's overall wealth (source of wealth) — typically through documentation such as prior sale agreements, inheritance documentation, business income records, or investment statements. Incomplete or poorly organised source-of-funds documentation is consistently the most common cause of delay in UAE facility approval, particularly for clients with complex or multi-jurisdictional wealth.

It scales to the situation. A straightforward mortgage review for a first UAE property purchase needs a lighter engagement than a complex multi-facility, cross-border securities-backed lending review for a family with substantial diversified wealth. We scope the engagement to match the actual complexity and value at stake rather than proposing a uniform package regardless of facility size.

PNPC charges a transparent advisory fee — either a fixed project fee for a discrete facility review and comparison, or a retainer arrangement for clients with ongoing borrowing needs and facility monitoring requirements. The fee is scoped based on the complexity of the facility, the number of lenders being compared, and whether cross-border structuring is involved, and is confirmed in writing before work begins. The fee is never structured as a percentage of the facility amount or contingent on the client borrowing more.

Yes, where it adds genuine value — particularly for facility negotiation meetings, term sheet discussions, or when a client wants an independent advisor present to ask the questions a lender's own team is unlikely to raise unprompted. This is arranged based on the specific stage of the engagement rather than being a routine requirement for every interaction.

We say so directly, with the specific reasoning — whether that is an unfavourable loan-to-value ratio relative to the asset's risk profile, an unfavourable cross-collateralisation clause, a mismatch between the facility currency and the client's actual liabilities, or simply that the client's stated objective is better served by a non-debt alternative. We do not have an incentive to recommend proceeding, which allows us to give this advice as plainly as the situation warrants.

Yes. We review facilities in any currency the client's bank or lender offers, and specifically assess the currency exposure created when a facility's currency does not match the currency of the underlying asset or the client's primary liabilities — since a currency mismatch introduces exchange rate risk on top of the facility's own market and credit risk, which is easy to overlook when focused only on the headline interest rate.

Facility documentation commonly includes provisions that can be triggered by the borrower's death or incapacity — acceleration clauses requiring immediate repayment, or requirements for the estate or a successor to requalify for the facility. Where a leveraged asset forms part of a family's succession plan, we review existing and planned facilities specifically for these provisions and advise on documentation or restructuring so the facility transfers as smoothly as possible rather than creating a forced-sale event at an already difficult time for the family.

For a relatively straightforward single-facility review and comparison, the advisory process — discovery, comparison, documentation review — typically takes 4–6 weeks, though actual facility completion also depends on the lender's own processing time, which PNPC does not control. Cross-border structuring involving Indian assets or FEMA considerations typically adds 1–2 weeks for coordination with PNPC's India offices.

Debt facilities advisory is delivered from PNPC's Dubai office to clients across all seven Emirates, using the same review process, lender comparison approach, and ongoing monitoring regardless of which Emirate the client resides in or where the underlying asset is located.

Yes. A review of an existing facility — checking current terms against the market, assessing whether the loan-to-value and margin call structure still fits the client's current asset position, and identifying any cross-collateralisation or negative pledge exposure the client may not have fully appreciated at signing — is a common and valuable standalone engagement, separate from advising on new borrowing.

PNPC's broader loans and banking advisory covers business-purpose lending — working capital, trade finance, term loans for a UAE operating entity — assessed primarily on business commercial merits. Private Wealth Management - Debt Facilities Advisory is specifically framed around an individual's or family's personal wealth strategy, including how business-level debt and personal guarantees interact with the family's overall balance sheet, succession plans, and risk tolerance. Many family business clients need both perspectives considered together, which PNPC coordinates as one engagement.

PNPC's review focuses on the financial and structuring risk in facility documentation — loan-to-value mechanics, margin call triggers, cross-collateralisation, currency and rate exposure, and how the facility fits the client's broader wealth position. For matters requiring formal legal opinion or contract negotiation beyond this financial review, we coordinate with the client's own legal counsel or refer to a suitable UAE law firm, since facility documentation is a legal contract and benefits from qualified legal review alongside our financial and structuring assessment.

All client financial, wealth, and personal information shared as part of a debt facilities advisory engagement is held under PNPC's standard professional confidentiality obligations as a practising accountancy and advisory firm, and is not shared with any bank, lender, or third party without the client's explicit instruction to do so as part of progressing a specific facility.

PNPC's engagement letters set out the notice and termination terms for the specific engagement — whether a fixed-scope project or an ongoing monitoring retainer — and clients are free to end the engagement with reasonable notice as agreed. Any facility already arranged remains directly between the client and the lender regardless of whether the PNPC advisory engagement continues.