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GLOSSARY

Quasi security definition

Published by a LexisNexis Banking & Finance expert

What does Quasi security mean?

The term quasi-security is used to classify a variety of arrangements that are used to provide a lender with protection against the risk of a borrower failing to repay. Unlike security, quasi-security does not create rights against assets. The rights it creates are rights against a person.

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Characteristics of commercial letters of credit

Characteristics of commercial letters of credit Commercial letters of credit (also known as traditional letters of credit or L/Cs) are used in relation to the movement of goods in the context of international or domestic trade. They are often used as a method of payment under contracts of sale because they are a useful tool where a seller has concerns over the creditworthiness of its buyer or the jurisdiction in which its buyer is located. They are sometimes referred to as documentary letters of credit or documentary credits. By contrast, standby letters of credit are a different type of letter of credit. They serve a different purpose. They are used in similar circumstances to on demand guarantees or performance bonds to provide a means for securing payment or other obligations. They are a form of quasi-security. For information on standby letters of credit, see Practice Note: Characteristics of standby letters of credit and Q&A: What is the difference between a standby letter of credit and a letter...

Bermuda—cross border banking and finance guide

Bermuda—cross border banking and finance guide Loan market and developments Please provide a brief overview of the current state of the loan markets in your jurisdiction and any significant recent market developments. As of the latest assessment, Moody's outlook on Bermuda’s banking sector remains ‘stable’ and is driven by the contingent liability risk from the island's large banking sector. Moody reported that Bermuda's very strong institutional framework, very high per capita income, and strong external position are underlying credit strengths that bolster Bermuda's capacity to absorb potential future shocks. Bermuda’s financial services regulator, the Bermuda Monetary Authority, has reported that, as at September 2024, the capital adequacy levels at Bermuda’s banks were well above the minimum regulatory requirements under Basel III, with the sector’s risk asset ratio at 25.6%, the common equity tier 1 capital ratio at 24.2% and the leverage ratio at 7.7%. Please provide a brief overview of forthcoming changes to the law or other matters that may affect the loan markets...

Discover our 49 Practice Notes on Quasi security

Comfort letter: non-binding—for a bilateral facility agreement

Comfort letter: non-binding—for a bilateral facility agreement [On headed notepaper of comfort letter provider] To: [insert the full name and address of the lender] [insert date] Dear [insert full name of lender] Facility agreement dated [insert date] (the Facility Agreement) between [insert name of borrower] (the Borrower) and [insert name of lender] (the lender) We refer to the Facility Agreement. We confirm the following: 1 [The Borrower is our wholly-owned subsidiary. OR We are the beneficial owner of [insert percentage] per cent of the issued share capital of the Borrower.]

Confirmation of guarantee on variation of underlying facility agreement (bilateral)

Confirmation of guarantee on variation of underlying facility agreement (bilateral) [ To be printed on the headed paper of the Guarantor ] [insert date] To: [insert name and address of the lender] Dear [insert full name of lender] 1 We refer to the facility agreement dated [insert date of facility agreement] between [insert name of borrower] (the Borrower) and [insert name of Lender] (the Lender) as amended, novated, supplemented, restated or replaced from time to time in accordance with its terms (the Facility Agreement). 2 We refer to the guarantee dated [insert date of guarantee] between [insert name of guarantor] (the Guarantor) and the lender as amended, novated, supplemented, restated or replaced from time to time in accordance with its terms (the Guarantee). 3 We refer to the [amendment letter OR amendment agreement OR amendment and restatement agreement] dated [insert date] entered into by the borrower and the Lender in connection with the Facility Agreement (the Amendment Agreement). 4...

Dive into our 9 Precedents related to Quasi security

Can I safely delete a ‘suspense account’ clause in a guarantee?

Can I safely delete a ‘suspense account’ clause in a guarantee? This Q&A focuses on the whether or not a ‘suspense account’ clause in a guarantee can safely be deleted when acting for the beneficiary of a guarantee. Summary If a guarantor requests that a ‘suspense account’ provision in a draft guarantee should be removed it is normally better for the beneficiary of the guarantee to refuse the request and explain why the suspense account is needed. A suspense account provision can help a beneficiary maximise its recoveries from one or more guarantors without imposing any greater liability on them. What is a suspense account clause? For an example of a suspense account provision see clause 8 Credit to a suspense account of our Precedent: Guarantee and indemnity: cross guarantee from group companies—bilateral—all monies. The recommended forms of facility agreement published by the Loan Market Association (LMA) contain similar provisions; see for example clause 18.6 Appropriations of the LMA Multicurrency Term and Revolving facility agreement available to LMA...

When a distributor sells goods that are subject to a retention of title clause, but with the right to resell those goods in the course of its business, is any onward sale by the distributor as an agent on behalf of the original supplier as title has not passed?

When a distributor sells goods that are subject to a retention of title clause, but with the right to resell those goods in the course of its business, is any onward sale by the distributor as an agent on behalf of the original supplier as title has not passed? In answering your query we have limited our research to cover a sale of goods between two businesses as part of an arm’s length commercial transaction. Under the Sale of Goods Act 1979 (SGA 1979), property in specific or ascertained goods passes to the buyer when the contracting parties intend it to pass (SGA 1979, s 17) and a seller can, as a term of the contract, reserve the right of disposal (SGA 1979, s 19). A retention of title (ROT) clause allows the seller to retain title to goods which it has delivered to a buyer until the buyer has paid for them in full or, where permitted to do so, sold them on to a...

See the 26 Q&As about Quasi security

Banking and Finance weekly highlights—25 February 2021

This week's edition of Banking and Finance weekly highlights includes: (1) The Working Group on Sterling Risk-Free Reference Rates publishes a paper on ending new use of GBP LIBOR in derivatives, (2) UK Export Finance launches new financing scheme to help SMEs export goods and services and (3) News Analysis on the Re Gategroup Guarantee Ltd case which determines that the new UK restructuring plan falls outside scope of Lugano Convention 2007.

Banking and Finance weekly highlights—4 February 2021

This week's edition of Banking and Finance weekly highlights includes: (1) News analysis on the key features of the exposure drafts of the multicurrency compounded rate/term rate facilities agreements published by the LMA, (2) the LMA publishes a response to EBA discussion paper on management and supervision of ESG risks for credit institutions and investment firms and (3) ISDA and FIA respond to European Commission consultation on the review of CSDR.

Read the latest 15 News articles on Quasi security