NETHERLANDS Law and Practice Contributed by: Mandeep Lotay and Dámaris Engelschman, Freshfields LLP
3.8 Bonds/Notes/Securities The terms and conditions of debt instruments are typically included in a trust deed, and for public deals are disclosed in a prospectus. The terms and conditions include matters as to the nature of the debt instruments, amounts, terms, interest rates, security, events of default, any call or put options with respect to the note instruments, provisions regarding noteholder consent for certain decisions and noteholder voting procedures. The terms and conditions also refer to the priority of payments, as well as the limited recourse nature of the debt instru - ments and non-petition covenants. Boiler-plate provisions, such as governing law and jurisdic - tion, are also included. 3.9 Derivatives Traditional securitisations frequently include swap arrangements to protect securitisation asset cash flows against currency and/or inter - est rate mismatches with the securitised debt. 3.10 Offering Memoranda Prospectus Regulation (EU) 2017/1129 dictates whether a prospectus is required, and what the prospectus content should cover. This will typi - cally be the case for public deals, where the notes are offered to the public and listed for trad - ing on a regulated market. For transactions that are not listed on a regulated market, an offering memorandum is used which is similar in sub - stance to a prospectus. For non-listed private transactions, a transac - tions summary is submitted to the regulator in accordance with the EU Securitisation Regula - tion, setting out the main terms of transactions.
frequency with which such information must be provided. As set out in 3.1 Bankruptcy-Remote Transfer of Financial Assets , certain events may cause the Servicer to be replaced and/or the Servicing Agreement to be terminated. 3.6 Principal Defaults Typical events of default under a securitisation include the following: • non-payment by the issuer; • breach of (material) obligations by the issuer; • insolvency of the issuer; • cessation of business of the issuer; • litigation against the issuer; and • invalidity of security. The consequence of an event of default would typically be the possibility for the security trustee or be required, as instructed by the controlling noteholder group, to accelerate all or part of the payment obligations of the issuer. Paired with the acceleration, the security trustee will gener - ally have the right (or may be required by the rel - evant noteholder majority) to enforce all or part Transaction indemnities provided vary from deal to deal but, in general, the seller/originator will provide indemnities to the SPV for breach of warranty and undertaking (but excluding in rela - tion to the credit performance of the financial assets). Such indemnities may be limited in time and quantum. The SPV will also provide a series of indemnities to the Security Trustee for itself and on behalf of the secured creditors for certain matters, such as breach of representation and undertakings. of the transaction security. 3.7 Principal Indemnities
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