A pledge is one of the four types of security recognised under English law—the types of security are described in Practice Note: Types of security.
For a general introductory guide to security, see Practice Note: Introductory guide to security in a lending transaction.
This Practice Note explains:
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what a pledge is
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the type of interest created by a pledge
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the type of assets which can be pledged
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how to perfect a pledge
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priority issues in relation to pledges, and
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how to enforce a pledge
For ease of reference, in this Practice Note:
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the 'pledgor' refers to the party providing the pledge (which may in practice be the borrower or a third party security provider)
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the 'pledgee' refers to the party to which the pledge is granted (which, in practice, is likely to be the lender or possibly a security agent), and
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the 'secured obligations' refers to the obligations expressed to be secured by the pledge (eg the obligations of a borrower to a lender under a facility agreement)
For
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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Priority definition
What does Priority mean?
The ranking of security interests ie the order in which each of the secured creditors can claim on the secured property in an enforcement or insolvency scenario. A deed of priority or intercreditor deed can vary the priority a security interest enjoys by virtue of general law.
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