Document background
The Security Trust Deed is a fundamental document in secured financing transactions under Hong Kong law, particularly in scenarios involving multiple lenders or bondholders. It is utilized when there is a need to establish a trust structure for holding and managing security interests efficiently, avoiding the complexity of multiple direct security arrangements. The deed creates a security trust whereby a professional trustee holds security interests on behalf of various creditors, manages the security package, and acts on the creditors' collective instructions. This arrangement is particularly valuable in syndicated lending, bond issuances, and other structured finance transactions where having a single point of security administration is beneficial. The Security Trust Deed includes detailed provisions on the trustee's powers and duties, enforcement mechanisms, proceeds distribution, and the relationship between various stakeholders, all while ensuring compliance with Hong Kong's trust laws and securities regulations.
