Mandaris offers the opportunity to enjoy the benefits of using a security agent in commercial structures through its professional trust company Mandaris Trustees (Malta) Ltd, a licensed trust company recognized by the Trusts and Trustees Act. In the case of a trust offering, the agent may grant and hold guarantees on his behalf (indicating that he is acting in his capacity as security agent) regardless of the number of creditors (or lenders) and regardless of any transfers or transfers made by the bondholders of their interest in the facility. In accordance with STA`s performance, the borrower is required to create all securities for the benefit of the security agent, including a mortgage on real estate. The sale-leaser imposes a burden on the borrower`s assets, including participation in underlying securities on behalf of multiple lenders. Thus, under the Hypothecation/Mortgage agreement and any other charges of other securities are created by the borrower for the benefit of a single entity called “Security Trustee” for the benefit of lenders. In other words, lenders are represented by the security agent as a single representative. Since it is a contractual agreement, it is entirely legitimate, valid, binding and enforceable. The security agent can assist in a number of different scenarios, whether it is a simple bond transaction or capital raising structures. If the transaction proceeds according to the plan, the debtor withdraws his debt, the trust fund is dissolved and the title to the property is returned to the debtor. In the event of a default, the Maltese civil code provides that the protection agent has the legal right to liquidate the assets held and to pay the proceeds to creditors. The agent is required to act reasonably and fairly in the application of security rights, and must continue to impose a fiduciary duty on the beneficiaries of the security agent. In the case of financial transactions such as securitization, it is essential that the security agent be both an experienced professional and an independent party who has the right to have access to appropriate and relevant information about the assets, in order to enable the agent to monitor the issuers` compliance with the rating authority of the obligations defined in the trust company.
The agent`s task is to reduce complications and provide added value and comfort to participants. Following serious financial difficulties, the lenders first tried to impose their security by selling the group, which was eventually achieved through restructuring. The mezzanine lenders proposed a restructuring that would allow them to retain some capital and were therefore unhappy that the restructuring eventually obtained cancelled their interest. They challenged the validity of the restructuring and made a number of allegations of breach on the part of the security agent. The interesting points of the decision are: The most obvious advantage of the involvement of a security agent is that it protects the rights of bondholders. Essentially, the security agent can prevent any uncoordinated action that could affect the implementation of the financial transaction.