When should a company use a collateral agent (also known as a security guard or security agent)? When lenders finish collateral for their collateral loans, a security guard is often appointed to enforce security rights in the event of the borrower`s default as part of the credit or borrowing documents. In some legal systems, it may be necessary to designate the warranty operating company as a guaranteed party for the privilege to be effective. The agent may be required to sign documents that are governed by local law and that create a right of pledge and give the agent the opportunity to exercise rights over the guarantees (for example. B a forced execution). In this case, the agent must respect the local advisor – at the expense of the transaction sponsor or the borrower – to verify these documents and ensure that the social protection officer is not subject to unexpected commitments. You can also maintain the guarantees for the duration of the loan. There are several reasons why the appointment of a third party may be desirable. There may be a consortium of lenders for loans, so it may be useful to centralize collateral rights by delegating them to an agent acting on instructions of the required number of lenders (as shown in the transaction documents). It is also possible that the guarantees are held in a jurisdiction where the lender or agent is not present. The creditor`s rights to guaranteed security and guarantees are generally determined by local laws, so it may be useful to recruit a local agent who is familiar with the local jurisdiction. It is also possible that the lender may not be able to hold guarantees, and it is therefore necessary to maintain an agent with the appropriate skills. The following key terms must be included in an agreement on security guards: an agreement on security guards or security guards includes the date of entry into force of the document, the names of the contracting parties, the designation of the institute as a security guard, the tasks of the security guard and its limitations. The provisions relating to the recourse by the security officer, the rights of the parties insured against the debtor.
It should also include other clauses allowing the security officer to obtain professional assistance or advice, resign from the security officer, pay his fees and establish a relationship between the security officer and the secure parties, to ensure that the security officer does not make arbitrary decisions regarding safeguards. , except under the direction of lenders. As with any legal agreement, caution is required when setting conditions, in order to avoid unexpected debts. The recycler may be required to hold certain types of warranties. Guarantees can be a species in which a pledge can only be effective if the guarantee is physically held by someone other than the borrower. This guarantee often consists of documents such as share certificates, contracts or documents. Transaction documents may require the warranty publisher to take specific safeguards, such as safe storage in safe, fire-resistant facilities. B and the indication in its records that the guarantees are held in favour of the lenders.