Bond and Sukuk Trustee Services
As a registered capital market service provider with the Securities Commission Malaysia, Pacific Trustees acts as an intermediary between bond/sukuk issuers and bondholders, ensuring compliance and protecting bondholders’ interests. We manage securities and designated accounts for Private Debt Securities (PDS), including Asset-Backed Securitization.
We monitor market developments and ensure issuers comply with Trust Deed terms. We also mediate the resolution of non-compliance issues and ensure securities are properly perfected according to PDS structures.
Our services include representing bondholders, notifying them of defaults, and taking necessary actions to enforce repayment. We manage key designated accounts like the Finance Service Reserve, Disbursement, and Operation Accounts, ensuring proper fund distribution, especially during defaults.
The role of a Bond Trustee and Security Trustee/Agent primarily includes:
- Constantly monitoring industry and market developments in the Private Debt Securities (PDS) business to keep up with regulatory changes as well as market specific practices.
- Proactively involving and participating in pre-issuance documentation meetings by providing proper and correct feedback and comments to the parties involved.
- Continually developing and enhancing systems (both operationally and information technology-related) and fortifying human resource management and planning to meet modern stringent regulatory and legal requirements.
- Engaging in and providing positive feedback to regulators and industry players/participants to enhance existing Bond structures.
- Persistently engaging Issuers to ensure proper monitoring of compliance with covenants, terms and conditions of the Trust Deed.
- Providing or facilitating obtaining “win-win” solutions for both Issuers and Holders for non-compliance, breach or event of default conditions.
- Ensuring that all securities to be held by the Security Trustee are perfected at the time and in the manner prescribed in the relevant PDS structures.
Our services include :
- Representing and protecting the interest and rights of Bondholders in accordance with the Trust Deed
- Notifying Bondholders of the occurrence of any trigger event(s) and/or event of defaults as soon as the Trustee becomes aware of such event(s) occurring.
- Upon proper Bondholders’ instructions and indemnification, taking such steps and/or instituting such proceedings to enforce the security for the bonds/notes and to enforce repayment of the bonds/notes and payment of interest.
- Ensuring that the requisite administration and monitoring functions are carried out in a professional manner as required by the transaction documents.
- Acting as the focal point for relationships between Bondholders and Issuers.
- Convening Bondholders’ meetings as and when appropriate.
In addition, a Bond Trustee usually has the following independent powers and discretions:
- agreeing to minor amendments and waiving technical breaches; and
- certain events of default do not trigger acceleration of the debt securities unless the Bond Trustee has certified that the events are, in its opinion, materially prejudicial to the interests of the Holders of the securities.
- Issuer appoints Trustee (Bond Trustee/Security Trustee) & Facility Agent for the bonds issuance programme.
- Issuer opens the Designated Account and charged to the Security Trustee. Detailed below are some of the examples of Designated Account:-
i. Finance Service Reserve Account
ii. Disbursement Account
iii. Proceed Account
iv. Operation Account
Security Trustee will solely operates the Designated Account under item (i) to (iii), while the Operation Account will be solely operated by the Issuer.
When Event of Default is declared Operations Account will be operated by the Security Trustee.
Issuer issues bond to the bondholders.
3a)Facility Agent updates the details of the issuance in BNM Fast website.
3b)The bonds are credited into the CDS account maintained by the Bondholder with ADI.The bond proceeds are remitted to the Disbursement Account solely operated by the Security Trustee.
The Security Trustee release the funds in accordance with the utilization proceed schedule in the Trust Deed (payment of expenses in relation to the issuance, built up sum to FSRA, release to Operation Account).
The Security Trustee remits the coupon/redemption payment to Facility Agent. Facility Agent remits the coupon/redemption payment to BNM Account.