A lombard loan is a loan secured by collateral in the form of securities, fixed-term deposits, precious metals, and other marketable forms of surety. The amount of the loan is set by the collateral value of the deposited securities. This is adjusted at regular intervals and is determined by the quality of the borrowers issuing the securities in combination with the market situation. A lombard loan may be taken up in a variety of currencies as an overdraft facility or as a fixed advance. The Bank may also issue payment undertakings or guarantees in favour of third parties.
