ArtSecure Capital, a finance company that specializes in loans secured by blue chip fine art, is preparing to launch a CNF 250 million ($310.8 million) securitization market, expanding financing options for high-end art dealers and private collectors.
The proceeds will enable ArtSecure to help its global clients refinance loans secured by portfolios of well-known pieces from recognized artists—which the industry refers to as blue chip.
The deal has already raised enough to cover CHF 100 million in existing art loans and expects to raise up to CNF 250 million, according to Xeno Marugg, head of corporate finance at Zurich-based Finanz Konzept, the placement agent working with ArtSecure Capital.
Executives expect an early 2026 closing on one tranche of notes, with a rating of A or AA from Morningstar | DBRS.
Blue-chip potential
Sotheby's launched the first art-loan secured deal with a $700 million securitization almost 18 months ago. Now, the market for art loans is expected to reach between $33.9 billion and $40.4 billion in 2025, according to Finanz Konzept, suggesting an ample pipeline of assets for future securitizations.
At issuance, the notes are expected to pay a coupon of about 2.5% over the Swiss Average Rate Overnight (SARON) with an expected maturity of seven years, according to a deal overview.
ArtSecure will repay interest to noteholders during the term and then collects principal at the end of the term. Non-amortizing are typical for art-secured loans, and this transaction benefits from a low default risk, due to a relatively conservative loan-to-value ratio of 50%, according to Finanz Konzept.
In this case the borrower has a two-year loan, which can be extended evert two years, potentially as often as the borrower likes, Marugg said. Munich Re underwrites a default insurance policy on the loan, giving credit support, according to the deal overview.
Only loans on blue chip art collections, which typically exceed CHF 500,000 in value—will back the securitization, according to Marugg.
"We are targeting 10 different art portfolios, in the beginning," Marugg said. "They will probably increase during the lifetime of the loan as new borrowers come in."
Those prospective art collections include one from a European art dealer who runs a private, family-owned gallery, and high-net-worth private collectors from the United States and Asia.
As the borrower, ArtSecure has a couple of options to avoid a mismatch in the securitized portfolio between invested capital and maturing art loans. If a collector, dealer or other borrower does not want to refinance a maturing loan, then ArtSecure can try to fill the asset vacuum with new loans on other blue-chip collections, or it can return capital to investors.
