Document background
A Floating Deed of Trust is utilized in complex financing arrangements where security needs to be taken over a changing pool of assets under German law. This document type adapts common law floating charge concepts to work within the German legal framework, which doesn't recognize trusts in their traditional form. It's particularly relevant for businesses with rotating inventory, receivables, or other assets that change in the ordinary course of business. The document must comply with German property law principles (Sachenrecht) and registration requirements while providing flexibility in the security package. It includes mechanisms for asset substitution, release provisions, and crystallization events, all structured to be enforceable under German law. The security arrangement typically supports larger financing transactions such as syndicated loans, asset-based lending facilities, or corporate bond issuances.
