Security Trustee Service

Security Trustee Services

Our Service

Bluewater provides independent trustee services on a range of debt transactions. We offer onshore and offshore asset recovery services for deals with securitised collateral, providing a  straightforward service to different types of borrowers whilst protecting the interests of lenders.

+44 (0)121 725 1949

info@bluewatercapital.co

The Security Trustee Role

A Security Trustee is an independent entity that sits between bondholders (investors) and the issuer (borrower). 

The Security Trustee holds a charge over the lender’s assets on behalf of and for the benefit of the bondholders. In the event a bond issuer fails to meet the payment terms laid out in the investor documentation, the Security Trustee has an obligation to act. The Security Trustee can enforce the charge on the lender’s assets and may then liquidate the company, distributing its remaining assets fairly amongst the creditors.

Appointing a Security Trustee is not a form of financial guarantee for the investors. The value of the assets held as security will be subject to market conditions at that time. 

Case Study

Eterna, Private Clients Europe

Eterna Private Clients Europe specialise in the fields of Finance, Securities, Structured Solutions, Insurance and Real Estate. They raise growth capital for Private Banks, Hedge Funds, Real Estate, Insurance, Telecom and Energy Companies as well as IPOs and M&A advisory.

Eterna has developed a unique MTN ‘pass-through’ debt issuance program which offers asset backed and/or insurance wrapped bonds. The insurance wrap offers a bond performance backstop.

For the asset-backed element of Eterna’s notes, Bluewater has been appointed Security Trustee for the first tranche ($66mln) of a listed $8 billion Medium Term Note issuance programme of the pass-through notes. The programme utilises collateral that has been independently valued at a discount to commercial trade valuation for which Bluewater acts as trustee.

Benefits to the Issuer of appointing a Security Trustee

  • One chargor (Security Trustee) is detailed on registers as opposed to numerous investors, who may not all be able to be detailed on some registers
  • Save on cost and complexity of registering each individual investor
  • The make up of investors may change over the course of the bond. Appointing a Security Trustee avoids administrative cost and inconvenience of transferring security to new investors
  • Appointing a Security Trustee avoids uncoordinated acts by investors that may affect financial transaction efficiency

Benefits to the Investor of a Security Trustee being appointed

  • Independent point of contact should an Issuer default on a financial obligation to the Investor
  • Coordinated approach by Investors to appoint insolvency practitioners if required
  • Appointing insolvency practitioners externally to a Security Trustee can be costly

 

Why Bluewater Capital?

Bluewater Capital have acted as Security Trustee for a large number of listed and unlisted offers. We have experience in working with issuers to restructure current offers and managing the delicate process when Borrowers do not meet their financial obligations to their investors.

 If you would like to understand more about the role of a Security Trustee or would like Bluewater to assist your offer, please contact us on 0121 725 1949.