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

  • Securitisation—security
  • The purpose of security in securitisations
  • The security package
  • The secured creditors
  • Note events of default
  • Acceleration and enforcement
  • The importance of administrative receivers for UK securitisations: Insolvency Act 1986, s 72B
  • The priorities of payment, or 'waterfall'
  • Problems with enforcement
  • Corporate Insolvency and Governance Act 2020

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. For guidance, see Practice Note: Brexit—impact on finance transactions—Brexit planning and impact—financial services, Brexit—impact on finance transactions—Key issues for securitisation transactions and Brexit—impact on finance transactions—Derivatives and debt capital markets transactions—key SIs.

The purpose of security in securitisations

In a securitisation, the issue of security is particularly all-encompassing: all of the issuer's rights are secured in favour of a security trustee for the benefit of all the issuer's secured creditors, usually pursuant to a single security deed.

The creation of enforceable security interests over the underlying assets of the issuer (called the 'security package') consequently underpins both the credit and the legal analysis of

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