Security Trustee Services

Security Trustee Services

Our Service

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

Security Trustee Services

What is a Security Trustee and why is it important?

A security trustee is an independent entity that sits between bond holders (investors) and the issuer (borrower). Many debt investments require a firm to act as the security trustee. The security trustee’s primary responsibility is that of acting impartially but representing the interests of the bond holders, especially if a bond issuer fails to meet an interest payment.

The security trustee takes a charge over the lender’s assets, typically for the benefit of the investors. The debenture deed agreement is signed by the issuing firm and registered with Companies House. 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 files a debenture on the lender’s assets and may then liquidate the company, distributing its remaining assets fairly amongst the creditors.

As the security trustee acts on behalf of all the bond holders, they issue one debenture on the remaining assets. Therefore, only one charge is filed. Consequently, the issuer consumes very little of its remaining assets in legal fees in the event of default and has a greater ability to repay the bondholders.

Security Trustee Services

What is a Security Trustee and why is it important?

A security trustee is an independent entity that sits between bond holders (investors) and the issuer, (borrower). Many debt investments require a firm to act as the security trustee. The security trustee’s primary responsibility is that of acting impartially, but representing the interests of the bond holders, especially if a bond issuer fails to meet an interest payment.

The security trustee takes a charge over the lender’s assets, typically for the benefit of the investors. The debenture deed agreement is signed by the issuing firm and registered with Companies House. 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 files a debenture on the lender’s assets and may then liquidate the company, distributing its remaining assets fairly amongst the creditors.

As the security trustee acts on behalf of all the bond holders, they issue one debenture on the remaining assets. Therefore, only one charge is filed. Consequently, the issuer consumes very little of its remaining assets in legal fees in the event of default and has a greater ability to repay the bondholders.

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.

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