NEWSLETTER-2017

373 MISCELLANEOUS Use of the Trust Concept in Financing Deals Security Agent in Syndicated Financing As in any form of syndicated financing, security in project finance is generally held on behalf of the lenders and other finance parties, such as hedge providers by a security trustee or security agent 9 . In a syndicated financing deal, the security agent (the Security Agent) will hold the transaction security in trust on behalf of the credi- tors as a whole, the membership of which can vary from time to time. These creditors are typically the lenders and other secured creditors (the Secured Parties) within a syndicated loan arrangement. The trust structure provides so that the security does not need to be: • granted separately to each of the creditors, which can be ex- pensive and time consuming, and • retaken or re-registered if a Secured Party changes as a result of a loan transfer. The Security Agent is the main contact point and acts as a bridge between the borrower or security provider and the Secured Parties. It acts as the single entity responsible for the administrative tasks re- garding the security such as holding title deeds relating to the secured property and for making distributions to the other secured creditors following any enforcement. Thus, the Security Agent is authorised by the beneficiaries of the trust to perform its rights and duties and to exercise direct or incidental rights, powers and discretions under the terms of the security trust provisions in the facility documentation or security documents. The security trust provisions in the facility documentation will include the specific duties and functions of the Security Agent in detail. The beneficiaries of the transaction security are all party to such documen- tation, which can be the facility agreement, a separate security trust 9 Banking & Finance- Project finance; Security in project finance transactions- Se- curity in project finance transactions, Lexis PSL.