The Tamesis
This week, Sotheby’s Financial Services (SFS) announced it had priced a $900 million securitization secured by mortgages on art and collectible cars, according to the company. Sotheby’s said the deal is scheduled to close on February 3 and is expected to receive a top-tier Morningstar DBRS credit rating.
In short, the deal bundles hundreds of loans to collectors, using art and luxury cars as collateral, and sells the rights to collect those future loan payments as bonds to institutional investors. These investors receive regular payments as borrowers repay their loans, while Sotheby’s receives cash upfront that can be used to make new loans.
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This is the second offering under Sotheby’s securitization program launched in 2024, when it issued approximately $700 million in bonds backed entirely by art-secured loans. The early deal was notable for pushing art loans into the same kind of financial markets long used for mortgages, car loans and other consumer debt. The scale and scope of the new offering builds on this foundation.
The growth in collectible cars is the clearest signal yet of the direction Sotheby’s business is headed. Rather than viewing art loans as a niche service associated with auction events, the company has positioned itself as a broader luxury asset financing platform, able to offer loans on everything from paintings to rare cars.
The expansion into collectible cars may also signal where this type of financing is headed next. Industry executives and advisers have long discussed the potential for lending and eventually bundling loans against other high-value collectibles, including watches, wine, jewelry and designer handbags. Many of these markets already support active secondary trading and price benchmarks, making them easier to evaluate than previous artworks. Whether they eventually enter large-scale securitization will depend on liquidity, transparency and how these assets perform in the next market cycle.
Ron Elimelekh, SFS co-head, chief operating officer and chief capital officer, said in a press release that the deal attracted investor interest that exceeded the company’s expectations. SFS has grown its loan portfolio by more than $1 billion over the past four years and has originated more than $12 billion in loans since its inception, the company said.
For the art market, the deal signals a quiet but significant shift. As auction sales remain uneven, loans have become one of the most reliable and scalable sources of income for primary homes, a trend that has been widely watched across the auction industry in recent years.
Whether this pattern can continue during the next market downturn remains an open question. Now, Sotheby’s latest securitization shows that art and now collectible cars are no longer just luxury goods, they are also financial instruments.
