The following Banking & Finance guidance note Produced in partnership with Dentons UK and Middle East LLP provides comprehensive and up to date legal information covering:
Borrowing base facilities ('BB Facilities') are secured on the assets forming the borrowing base, which consist of:
goods in storage or in transit
rights to payment for goods, such as payments due under sale contracts and payments under letters of credit, and other contractual rights under such contracts
the sales proceeds of goods, paid into a collection account
The assets used to secure the facility are constantly being traded and replaced. A borrowing base report (a 'BB Report') is prepared on a regular basis (usually weekly or fortnightly) listing the assets which are to constitute the security for the BB Facility at the date of the report. Each time a new BB Report is delivered, the list of assets constituting the security for the BB Facility is updated. As trading continues during the period up to the next BB Report, assets included in the BB Report will usually be sold during the course of that period.
In practice, the assets included in the BB Report move into different categories over a period of trading: goods in storage or transit are sold and then become rights to payment under sales contracts: those payments are then collected and the proceeds paid into a collection account, out of which the BB Facility debt may be serviced.
For more information on borrowing base facilities in general,
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234