Credit Suisse has created a new asset class by securitizing loans extended to oligarchs and entrepreneurs, backed by their luxury assets like superyachts and private jets. The Swiss bank reportedly sold $80 million in notes, which are linked to a larger $2 billion portfolio of loans. This move allows Credit Suisse to offload risk associated with these illiquid, high-value assets by packaging them into securitized products for investors.
Historically, superyachts are considered poor financial assets due to high operational costs, depreciation, and complex tax and legal considerations. However, the current market sees shipyards booked for years, pushing buyers towards existing vessels and potentially increasing demand for financing options for such purchases.
Superyacht ownership involves significant complexities, including VAT, customs duties, and the need for robust due diligence, especially concerning the vessel's tax status and the seller's background. Experts warn that buyers often overlook these "duller aspects" in their excitement, leading to potentially costly surprises. The new securitization by Credit Suisse suggests a growing financial interest in these luxury assets, despite their inherent challenges for individual owners.
