Role of a bond trustee
Role of a bond trustee

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Role of a bond trustee
  • Who is the bond trustee?
  • The role of the bond trustee
  • Reasons for appointing a trustee
  • Holding payments on trust for bondholders
  • Power to invest proceeds of payment
  • Monitoring the issuer
  • Acting on behalf of the bondholders—determining and/or waiving events of default
  • Acting on behalf of the bondholders—accelerating the bonds
  • Acting on behalf of the bondholders—modifying the terms of the bonds
  • More...

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 has an impact on this Practice Note. For guidance, see Practice Note: Brexit—impact on finance transactions—Brexit planning and impact—key issues for debt capital markets transactions and Brexit—impact on finance transactions—Derivatives and debt capital markets transactions—key SIs.

Not all bond issues involve a trustee. It is up to the issuer to decide whether to appoint a trustee or a fiscal agent—see Practice Note: Transaction structures—standalones versus programmes.

Involving a trustee has important consequences, particularly for the bondholders (see Reasons for appointing a trustee, below).

For ease of reference in this practice note the term 'bonds' is used generically to refer to all types of

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