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.

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