Security Trustee Services

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Security Trustee Experts

A trust can be used as a means of holding security over assets of a debtor for a number of creditors, for example, in a syndicated loan or a securitisation transaction. 

A security trustee is the entity holding the various security interests created on trust for the various creditors, such as banks or bondholders. This structure avoids granting security separately to all creditors which would be costly and impractical.

Acting as point of contact between borrowers and the secured creditors

A security trustee is a person or corporate entity which holds security for the benefit of others. The security involved may comprise a charge over property, a debenture over the assets and undertaking of a company, a bank account charge or a combination of other types of security for the performance of obligations.

Security trustees are often used in structures such as secured loan notes, where the benefit of the security is held on behalf of the loan note holders as a group. A security trustee is usually (but not always) an independent entity which is regulated by the Financial Conduct Authority or equivalent financial services regulator.

We are an Independent entity regulated by the Financial Conduct Authority

Here are some of the main reasons for using a security trustee as part of a structure

If the beneficiaries of the security are too numerous for them all to appear on the relevant register (such as the Land Registry in the case of a charge over property).

If the composition of the group of beneficiaries is likely to change over time (such as in the case of loan note holders) – appointing a security trustee in this situation avoids the inconvenience and cost of transferring the underlying security each time a new beneficiary is added or an existing beneficiary transfers its interest.

In order to demonstrate independence from the parties associated with the debtor, originator of the debt obligation, the charger or the subject matter of the security. In other words, if something goes wrong and the security needs to be enforced, the security trustee would act impartially in taking the necessary steps to enforce the security and distribute the proceeds of enforcement to those entitled

Have Questions?

A security trustee is, in its simplest form, the individual or entity that holds the various security interests generated for the trust of secured creditors, such as banks or bondholders, in a financial transaction that may be a securitisation transaction or a direct investment. The protection trustee protects the interests of investors as well as enforces safety upon default.

The most obvious benefit of a security trustee’s presence is that it preserves the interests of the secured creditors. The protection trustee will effectively avoid any uncoordinated acts that could affect the financial transaction’s efficiency. In addition, it will allow capital to be raised by contributions from different creditors without having to give each individual creditor separate protection, minimizing costs and complexity as well as saving time. In the trust, rather than in the individual properties, each creditor has a financial interest.

Bluewater Capital understands the dynamics of structured finance transactions, having, through its affiliated securitisation platform, been involved in a variety of securitisation transactions. Our team has the expertise and technological know-how to carry out this form of niche funding and to provide our customers with step-by-step guidance

Every component of the financial transaction. At the outset, we will build confidence to increase the confidence of potential creditors, over the course of a transaction and the current trustee to be removed or replaced and as part of a restructuring where a new security trustee is needed by new factors in a transaction. If the deal is cross-border or includes collateral with dynamic nuances such as aviation and maritime, Bluewater has the skills to assist

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