Security Trustee is normally appointed when Lenders / Financers are extending the finance to Borrower on Multiple Arrangement basis or on syndication basis. Normally in such arrangement, the Terms and Conditions of sanction of each individual Bank / Institution may differ except common security.
Therefore, Security Trustee is appointed, whose role is to create and hold the security on behalf of all the lenders till the time, the loan is settled.
It may be stated that Security Trustee cannot precipitate any action on its own unless it is specifically instructed by all lenders or by Facility Agent as per arrangement.
- advise on security creation procedure and stamp duty provisions/implications.
- create / hold the security in its own name (acting as trustee for Lenders)
- keep the security documents and documents of title in safe custody.
- act upon the instructions of the Lenders
- monitor the security & if need be, review financial position of Borrowers from time to time
- monitor the Asset Coverage Ratio, if stipulated.
- maintain Records and submit various reports to the Lenders.
- re-convey the mortgaged properties on repayment.
- enforce the security, if need be.
- monitor insurance policies.
We also extend the following services:
- Conceptualising, customising and structuring of the security documents with optimum efficiency (including advising on the stamp duty implications on the Borrowers), and compliance with all the terms and conditions of the facility documents. Thus, ensuring effective execution of transactions.
- Liasoning with the lead Lender and the Lender's legal counsel on drafting, finalization and execution of the security documents.
- Disseminating the information between the Lenders and the Borrowers.
- Prompt provision of information to the Lenders on any matter pertaining to the covenants or terms or conditions of the loan and security.
- Assisting the Borrowers and the Lenders in overall coordination and ensuring smooth financial closure of the project.