What is Lombard credit?

Lombard credit is credit secured by a pledge of liquid securities — most often listed shares or a diversified portfolio. It is frequently arranged as a revolving credit line: a limit set against the pledged assets that the borrower can draw, repay, and redraw, paying interest only on the amount drawn. Ownership of the pledged assets is retained throughout, and the facility is released when the credit is repaid. It is the same instrument as a Lombard loan, used as a standby line rather than a single advance.

A credit line, not a one-off loan

The defining feature of Lombard credit is flexibility of drawdown. Where a Lombard loan is typically a single advance taken at the outset and repaid at maturity, a Lombard credit line is a standing limit against your pledged portfolio that you draw against as needs arise — and repay and redraw as liquidity returns. For a holder who wants capital on standby rather than a lump sum on day one, the revolving structure is often the better fit: it keeps borrowing costs to the amount actually used and leaves undrawn headroom available.

How the limit is set

The credit limit is a loan-to-value against the pledged securities. It is set per portfolio, driven by the liquidity and free float of the holdings, their volatility, single-name concentration, and the size of the positions relative to their markets. A diversified, liquid book supports a higher limit than a single concentrated position. The variables are the same ones that drive the advance on a term loan; a fuller treatment sits on how much you can borrow against shares, with a transparent estimate available from the indicative LTV calculator.

What it costs

Pricing has two parts on a revolving facility: interest on the drawn balance — a reference rate such as SARON, SOFR, or EURIBOR plus a spread — and, in some structures, a modest commitment fee on the undrawn headroom that keeps the line available. There is no published rate card; the terms are a function of the portfolio and the structure. The interest rates and costs page sets out the components.

Lombard credit, Lombard loan, Lombard lending

These are one discipline described three ways. Lombard credit and a Lombard credit line emphasise the revolving facility. A Lombard loan emphasises a single drawn advance. Lombard lending is the activity itself, also called securities-backed lending. In each case the borrower pledges liquid securities, borrows against a fraction of their value, and keeps ownership.

Who uses Lombard credit

The revolving structure suits private clients and family offices that want standby liquidity for opportunistic investments, bridging, or cash-flow timing; founders and controlling shareholders who prefer a facility to draw on rather than a lump sum; and holders managing a portfolio through a period of activity. The recurring applications are set out under use cases.