Bond Trustee Service

Debt Capital and Debt Equity Markets

Bond Trustee and Security Agent Services

Pacific Trustees has vast expertise and experience in providing Bond Trustee, Security Agent and Administrative services to the Debt Capital and Debt Equity markets as well as other financial markets. We are typically appointed as an independent Security Agent and Security Trustee to avoid litigation arising from Bonds and other transactions involving bilateral and syndicated loans as well as other types of loans involving Arrangers, Borrowers and Lenders.

 

We also provide independent Trustee and Security Agent services for complex amendment, restructuring and enforcement processes. We have acted in respect of a broad range of Asset-Backed Securitisation (ABS) involving different asset classes, including plain vanilla ABS, asset finance, repacks, distressed assets, high-yield bonds, project finance securitisations, collateral loan obligations, non-performing loans, rental receivables for malls and offices, as well as automobile hire-purchase loans.

 

The role of a Bond Trustee and Security Trustee/Agent primarily includes:

 

  1. 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.

  2. Proactively involving and participating in pre-issuance documentation meetings by providing proper and correct feedback and comments to the parties involved.

  3. 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.

  4. Engaging in and providing positive feedback to regulators and industry players/participants to enhance existing Bond structures.

  5. Persistently engaging Issuers to ensure proper monitoring of compliance with covenants, terms and conditions of the Trust Deed.

  6. Providing or facilitating obtaining “win-win” solutions for both Issuers and Holders for non-compliance, breach or event of default conditions.

  7. 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.

 

In addition, a Bond Trustee usually has the following independent powers and discretions:

  1. agreeing to minor amendments and waiving technical breaches; and

  2. 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.

  1. Issuer appoints Trustee (Bond Trustee/Security Trustee) & Facility Agent for the bonds issuance programme.

  2. 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.

  1. 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.

  2. The bond proceeds are remitted to the Disbursement Account solely operated by the Security Trustee.

  3. 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).

  4. The Security Trustee remits the coupon/redemption payment to Facility Agent. Facility Agent remits the coupon/redemption payment to BNM Account.

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Pacific Trustees Berhad 

Unit A-11-8, 11th Floor,
Megan Avenue 1,
189, Jalan Tun Razak,
50400 Kuala Lumpur.

Tel:  603-2166 8830

© 2020 Copyright By Pacific Trustees Group International

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