SINGAPORE Law and Practice Contributed by: Lee Xin Mei, Cheryl Tan, Eugene Lee and Benjamin Liew, Rajah & Tann Singapore LLP
2.8 Security Trustees/Agents Security trustees hold the benefit of the security in a securitisation transaction on behalf of the holders. If required, the security trustee will take action to enforce the security and distribute the proceeds of enforcement in accordance with the terms of the transaction documents. Professional trustees will usually perform the role of a security trustee. 3. Documentation 3.1 Bankruptcy-Remote Transfer of Financial Assets The transfer of assets is generally effected through a sale agreement (such as a receivables purchase agreement) that includes provisions which address the following principal subject matters: • the assets to be transferred by the originator to the SPE; • the consideration for the purchased assets; • any conditions precedent; • any circumstances in which the SPE has the right to perfect its title to the assets; • any limited circumstances where the origina - tor is obliged to repurchase the assets or indemnify the SPE; and • any other undertakings, representations and warranties in respect of the originator and/or the assets. 3.2 Principal Warranties Warranties provided by the originator can gener - ally be categorised into two categories: • its corporate status (including its capacity, power and authority to enter into the transac -
tion, licensing status and solvency) (“corpo - rate warranties”); and • the assets being transferred (“asset warran - ties”). Asset warranties generally address matters such as title to the assets and compliance with the selection/eligibility criteria set out in the transac - tion documentation. Breach of a corporate warranty would generally trigger an event of default and/or early amor - tisation of the notes, and a claim in damages. Breach of an asset warranty could potentially trigger a repurchase obligation. 3.3 Principal Perfection Provisions Please see 6.3 Transfer of Financial Assets . 3.4 Principal Covenants The key covenants in every transaction would differ and are subject to negotiations between parties. Generally, the SPE’s activities will be limited by negative covenants. The SPE will also provide positive covenants relating to its corporate sta - tus, the transferred assets and compliance with various obligations under applicable law and the transaction documents. Failure to comply with any such covenant would generally trigger an early amortisation event or event of default under the notes. 3.5 Principal Servicing Provisions The servicer is appointed under a servicing agreement with the issuer to service the trans - ferred assets on a day-to-day basis, including collections and enforcements. The main obligations/role of a servicer include:
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