Role of a Security Trustee
A security trustee is typically appointed in debt financing structures and is a party engaged to hold security interests on trust for one or more creditors.
Appointing an independent entity to act as a security trustee is beneficial because the security trustee can:
- Facilitate transactions while protecting the securities;
- Help avoid conflicts of interest and maintain independence from the parties;
- Coordinate lenders, borrowers and other related entities involved in the transaction;
- Allow banks and financial institutions to focus on their core capabilities rather than create and enforce securities; and
- Avoid entering into multiple security agreements in situations where more than one lender is involved, which can be costly and unnecessarily complex.
Security Trustee Services
One Investment Group acts as security trustee and holds securities for a mix of lenders including foreign and domestic banks, managed funds, overseas hedge funds and other corporate lenders. As security trustee, we hold securities across the risk spectrum of the debt structure from senior to mezzanine.
The services OIG provides as security trustee include:
- Negotiate transaction documents prior to execution;
- Establish and maintain a register of securities held by the security trustee on behalf of the secured parties/beneficiaries;
- Act on the written instructions of the secured parties/beneficiaries (or their appointed facility agent) under the terms of the security trust deed as required;
- Hold legal title of securities for the benefit of the secured parties/beneficiaries;
- Enforce charges over the securities on behalf of the secured parties/beneficiaries in an event of default; and
- Distribute proceeds following enforcement.
We act as security trustee for a number of transactions of varying size, complexity, structures and assets. The secured assets include real estate, transport assets, consumer and commercial loan assets and infrastructure assets.
OIG can also provide a range of complementary services such as facility agent, calculation agent, paying agent, custody and escrow services. A full list of our Corporate Trust services can be found here.