FINE WINE BEING PAWNED FOR CASH IN NEW YORK

THE PRACTICE OF USING FINE WINE AS COLLATERAL TO SECURE SHORT-TERM LOANS IS GAINING TRACTION IN NEW YORK.

As per The Financial Times, speculators in pressing need of cash are falling back on pawning their containers of Château Lafite and Château d'Yquem.

Paul Aitken, organizer of Manhattan bank borro, told the FT that there had been a late surge in the utilization of wine as insurance to secure credits of over US$100k at premium rates of 2.5-4% a month.

"The advances we are composing on wine are enormous. One container of Château d'Yquem had an advance offer of US$48,000," he said.

At borro, whose customers incorporate business people looking for moment income, the estimation of advances sponsored by Fine Wines remains at US$4m – twofold that of a year ago.

While admitting to the FT that borro's plan of action shares "comparative standards" to that of a pawnbroker, Aiken is quick to separate himself from the affiliation.

"Most pawnbrokers don't do this kind of giving. They ordinarily give against gold and guns. We don't go close to that stuff," he told the paper.

Notwithstanding the five Bordeaux first developments, Pomerol-based Château Pétrus and Burgundy's Domaine de la Romanée-Conti are the wines most regularly utilized as guarantee to secure advances through borro.

Borro gives quick advances of up to $1m on assets including fine wine, watches, gems, extravagance autos, compelling artwork and obsolescents. To date it has subsidized credits to the estimation.