How to secure a loan with French wine

paulfrasercollectibles

2015-06-26 13:19:25

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How to secure a loan with French wine

Is the fine wine sector back on its feet? One leading investment bank certainly thinks so

Collectibles are often used as collateral for securing loans, with art and classic cars among the most common forms.

Yet fine wine is a new one on me.

Earlier this month Bloomberg revealed that a former senior director at Goldman Sachs has secured a loan from the bank with the help of 15,000 bottles of fine wine.

And after a worrying time for wine investors in the second half of 2011 and throughout 2012, Goldman Sachs' decision to embrace the wine sector could be a further indication that strength is returning to the market.

Liv-Ex's Fine Wine 100, which tracks the movement of the 100 most desirable wines in the world, including Bordeaux, Burgundy and Champagne, is up 5.6% in value since the start of the year.

It follows a 28.5% dip from July 2011 to December 2012, as China's desire for top wine at whatever the cost came to an end.

Sothebys wine auctionDRC - the Burgundy has been a strong performer amid declines for Bordeaux

The 14,985-strong collection of mostly French plonk includes a 1929 Domaine de la Romanee Conti (DRC)- the Burgundy one of the few bright points for the wine sector during the recent troubles.

"The Bordeaux are all first growth and other classified-growth and the Burgundies are all grand cru and top premier cru," David Parker, the head of California-based Benchmark Wine Group, told the publication.

The bottles hold a combined estimate of at least $1m.

"While we do not comment on individual loans due to client confidentiality, we take great care to apply high standards of risk management and appropriately value any form of collateral on all loans," the bank said.

And while public sentiment is seemingly set against the major banks these days, it could pay to keep close attention on their dealings with collectibles.

After all, I have never met a bank yet that has not operated out of its own self-interest...

I hope you enjoy this week's newsletter - as ever, we try to ensure that there's something for everyone - from (ice) hockey to fine art.

If you have any comments, please do get in touch at info@paulfrasercollectibles.com

All the best,

Paul

Paul Fraser

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