SINGAPORE Law and Practice Contributed by: Doos Choi, Pierre Dzakpasu, Janelene Chen and Pieter de Ridder, Mayer Brown
all relevant accounts, including the main pool - ing account. Given the nature of these arrange - ments, security will be of a floating – rather than fixed – nature. Lenders will generally recognise the working-capital efficiency and benefits of cash-pooling and cash-management arrange - ments. Treatment of hedging will vary from deal to deal, taking into account its commercial significance (for both the issuer and the lender) and the extent to which a hedging provider would be willing to provide hedging without the benefit of the trans - action security. 5.10 Bank Licensing As mentioned in 2.1 Licensing and Regulatory Approval ,there is no general requirement for a lender to obtain a licence or regulatory approval solely by reason of taking the benefit of security over assets located in Singapore. Lenders in a syndicate can (and, in fact, cus - tomarily do) appoint a trustee to: i) hold security on the syndicate’s behalf; ii) enforce the syn - dicate’s rights under the loan documentation; and iii) apply any enforcement proceeds to the claims of all lenders in the syndicate. There is no requirement in Singapore for security to be granted directly to each individual lender in a syndicate. 6. Enforcement 6.1 Enforcement of Collateral by Non- Bank Secured Lenders The finance documents will set out the circum - stances in which a secured lender (whether bank or non-bank) can enforce its collateral. There will, in the usual way, be a suite of represen - tations and warranties, undertakings, financial
covenants and events of default with an abil - ity by the lender to accelerate the loan upon a breach. There are no particular formalities which are required to make a demand under a loan or a guarantee, provided that the conditions for a demand (eg, non-payment) have been met. There are two main ways in which security can be enforced, by exercising a power of sale or by foreclosure. Power of Sale While a power of sale can arise by statute (the power of sale is almost always explicitly grant - ed by contract pursuant to the provisions of the relevant security agreement), in exercising such power, the chargee is generally bound to act in good faith and to obtain a proper price. Rather than exercise the power of sale directly, the chargee may (and usually will, if permitted by the agreement) appoint a receiver to conduct the sale. Foreclosure Foreclosure is a process by which the chargee becomes the absolute owner of the charged/ mortgaged property. Foreclosure must be sanc - tioned by a court order, and is not an enforce - ment method commonly pursued by creditors. Receivers A creditor may appoint a receiver if the relevant security document grants it the right to do so. Most security agreements will provide for the appointment of a receiver including the terms of any such appointment. The appointment must be in writing. Although the receiver is usually appointed by the lender,
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