As a result of increased demand for commercial financing as well as regulatory constraint (single obligor limit), it has become common to find two or more securing credit facilities through two or more financial institutions to a single borrower through consortia and loan syndication. When this occurs, it becomes necessary that a neutral party (the Trustee) be appointed to hold the asset/security backing the loan to ensure that the interests of both the Borrower and Lender is adequately protected.
The security provided is thus held as a common security by the Trustee on behalf of all the Lenders.
Our role specifically will include:
- andling the releases and substitution of property based on valuation, title and security issues.
- Carrying out the instructions of the secured Creditors.
- Admitting new syndicate members to participate in the lending and security without the need to amend or re-register the security.