A security trustee is a person or entity that is appointed to hold the security interest in assets that are being securitised. The security trustee is responsible for managing the assets and enforcing the security interest in the event of a default by the borrowers.
Here are some applications of a security trustee in securitisation:
- To hold the security interest: The security trustee holds the security interest in the assets on behalf of the investors. This means that the investors have a legal claim on the assets, even if the issuer of the securities defaults on its obligations.
- To manage the assets: The security trustee is responsible for managing the assets that are being securitised. This includes collecting payments from the borrowers, monitoring the performance of the assets, and enforcing the security interest in the event of a default.
- To enforce the security interest: If the borrowers default on their loans, the security trustee can enforce the security interest by selling the assets. The proceeds from the sale of the assets will then be used to repay the investors.
Overall, a security trustee is an important part of the securitisation process. It holds the security interest in the assets, manages the assets, and enforces the security interest in the event of a default.Overall, a security trustee is an important part of the securitisation process. It holds the security interest in the assets, manages the assets, and enforces the security interest in the event of a default.