What is the risk to a lender?
One possible risk to a lender is counterparty risk. However, this risk is mitigated in the following ways:
- Lenders only look to Phillip Securities, a reputable financial institution as the borrower;
- Phillip Securities ensures that collateral is provided in favour of the lender. Where securities are on-lent, Phillip Securities collects collateral from the borrower valued at least 105% of the market value of the loan.