Finance leases—security and default termination
Produced in partnership with Norton Rose Fulbright
Finance leases—security and default termination

The following Banking & Finance guidance note Produced in partnership with Norton Rose Fulbright provides comprehensive and up to date legal information covering:

  • Finance leases—security and default termination
  • Security
  • Default termination

BREXIT: As of 31 January 2020, the UK is no longer an EU Member State, but has entered an implementation period during which it continues to be treated by the EU as a Member State for many purposes. As a third country, the UK can no longer participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), but the UK must continue to adhere to its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit to the continuing jurisdiction of the Court of Justice of the European Union in accordance with the transitional arrangements in Part 4 of the Withdrawal Agreement. For further reading, see: Brexit—introduction to the Withdrawal Agreement. This may have an impact on the information in this Practice Note about the Cape Town Convention. For details, see Practice Note: Brexit—impact on finance transactions—Key issues for aviation finance.

Security

Security over the aircraft

The principal security in a lease financing structure will be the aircraft. Due to the valuable and mobile nature of an aircraft, it is paramount that the finance lessor can use a security and leasing structure which ensures that:

  1. the value of the aircraft is maintained to the greatest extent possible, and

  2. valid and enforceable security has been granted in respect