SBLOC / lombard loan

SBLOC / lombard loan — a credit line secured by a securities portfolio: the broker version is the SBLOC, the private-bank version the lombard loan, typically up to ~50% LTV on diversified holdings (far less on concentrated positions). It lets holders spend without selling — no gain realized, compounding uninterrupted. The failure mode, published in 2022: floating rates doubled while collateral fell 20%, and forced liquidations crystallized the very taxes being deferred. Survivable use: LTV under ~20–25%, outside liquidity, long horizon — and ranked below amortizing property debt in the course’s hierarchy.

First used in: 5.5 · Structures of the rich: banking tiers, trusts, PPLI, debt