Cash Secured Loan

Consumers' loan agreements are agreements in which the borrower is a physical entity and the loan is to be or is to be used entirely or predominantly for private, residential or budgetary use. Where a secured loan is a type of agreement for consumers' credits, the conditions laid down by the creditor are to some extent specified.

Furthermore, mandatory information must be provided to lenders, there are various demands on the creditor to act in a responsible manner, and there are various demands, such as the need for public access to SLAs. Who are the current secured financing vendors in your jurisdictions (e.g. global banking, domestic banking or non-banking)?

Principal secured financing institutions are: domestic banking institutions (many of which are subsidiary companies of multinational banks); domestic offices of multinational banking institutions; certain corporations and similar enterprises. Does your legal system use customary commercial credit facilities for secured credit operations? References are made to the types of credit issued by the Asia Pacific Loan Markets Association, but each creditor usually has its own type of documentary.

Syndications Are secured credit syndication schemes typically used in your legal system? It is not unusual to find bank loans secured by syndication. Most secured loans, however, go to companies that do not have enough debts to warrant a bank consortium and some companies that have enough debts choose to have a series of distinct bi-lateral agreements rather than a symmetric agreement.

As a rule, you structure syndicated facilities using a service agent who takes over credit management for the syndicate. However, this is not the case for the system. In your jurisdictions, does the Act allow collateral and warranties to be fiduciarily retained by a collateral fiduciary for the account of the bank consortium? The New Zealand legislation allows securities and warranties to be kept in fiduciary custody for the account of a consortium of banks.

Funding of SPE Is it customary for secured financial operations for SPE' (Special-Purpose Vehicles, SPVs) to use the funds to be funded for the safekeeping of financial instruments? As a rule, would collateral be provided for the SPV units or would creditors demand immediate collateral? SPAs are typically used only for those operations that for some purpose necessitate restricted recovery (e.g. a securitization operation or some type of venture financing).

Generally, the asset is not owned by an SPV. Usually, when the SNEs own the asset to be funded, the collateral for the asset and the interest in the SNI is transferred. When using a normal floating interest base it is the Bank Bill of Exchange Interest Base Ratio (BKBM), unless the loan is not denominated in New Zealand dollar, in which case it is the interest base applicable in the respective jurisdictions (e.g. LIBOR for pound sterling).

Warranties are contractually agreed. As a rule, these are bi-lateral agreements, but can be drawn up in the form of a document (i.e. without the recipient of the bond being a party). It must be in written form, but otherwise no special formality is necessary. There are no particular kinds of warranties that are not enforceable. In the event that a guaranty is obtained through improper leverage in which the creditor participates, it is not enforceable.

Describe the most commonly used ways to structure the priorities of debt and collateral. Almost in all cases, a single institution has a seniority. While there are priorities for all collateral, creditors usually complement or modify them through a contract between themselves.

Usually this is done through documents of precedence and secondary, but if there is a common collateral (e.g. in a scyndicated institution ), it is usually included in the escrow or other document under which the escrow agent is holding the collateral. Are there any tax, stamping tax or other charges to be paid when a loan, surety or interest is granted or enforced?

Limitations Are there limitations on lending by or the provision of collateral or guaranties to non-resident creditors? Are there any currency checks that limit payment to a non-resident creditor under a securities instrument, guaranty or loan contract? Is it possible to establish a collateral right over all the company's financial instruments?

Assuming so, would a lump-sum collateral arrangement be sufficient or is a lump-sum collateral arrangement necessary for each kind of assets? It can be done through a unique safety arrangement (a "general safety agreement/file"). Another kind of collateral is, however, preferable as a complement to a general collateral contract for some assets.

To best safeguard himself in respect of real estate, a creditor should take out a mortgag, which is a kind of surety arrangement that enjoys particular credit under New Zealand real estate laws. Often a creditor will depend exclusively on a general surety arrangement, but if, for example, a borrower's country is significant, the creditor will usually take the extra steps of establishing a mortgag in respect of that country.

What are the procedures for disclosing collateral on the most commonly used types of asset? Usually the collateral is cleared by the creditor who executes a document of clearance. If the securities were the object of entry of a financial sheet in the register of securities for private property, this financial sheet is usually modified (also by means of a relief if the securities are fully released) to take account of the relief.

Property Can collateral be provided for property? And if so, what are the most commonly used securities for property and what is the process? When property is a significant good, collateral is almost always provided in the form of a mortgages. Machines and plants Can securities be provided for machines and plants?

And if so, what are the most commonly used types of collateral for this type of ownership and what is the process? New Zealand's protection of individual properties (essentially anything but shore and ships) is subject to the 1999 Personally Owned Properties Securities Act. Machines and plants are private properties, so they fall under this law.

Collateral is typically provided in the form of a general or special collateral arrangement (an arrangement that explicitly establishes a right of title to the asset under the Personal Property Securities Act). Sometimes an arrangement, such as a financial leasing arrangement, is used whereby the collateral taker keeps title to the real estate.

New Zealand does not recognise that the collateral taker has only one interest, despite the retention of title by the collateral taker under the collateral right. In order to enhance the prioritisation of the securities, the collateral taker will almost always enter a financial identification card in an on-line registry (the Personal Property Securities Register).

Registration details the borrower, the secured debtor and the securities. Claims Can securities be provided for claims? And if so, what are the most commonly used types of securities for this type of ownership and what is the process? Claims are considered private ownership, as is the case with the provisions of the PTA.

Collateral is often provided in the form of a general or special collateral arrangement (an arrangement which, under the Personal Property Securities Act, explicitly establishes a right of title to the property). In many cases, however, the claims are instead ceded to the collateral taker. New Zealand considers that although the collateral taker becomes the proprietor under the transfer, he has only one interest within the meaning of the interest.

In order to enhance the prioritisation of the securities, the protection buyer will almost always enter a proof of finance in the securities registry for private assets. Registration details the borrower, the secured party and the securities. Available-for-sale securities Can securities be provided for existing securities? And if so, what are the most commonly used types of securities for this type of ownership and what is the process?

Cash and cash equivalents are considered private assets, as is the Act on Securities for Private Ownership. Collateral is typically provided in the form of a general or special collateral arrangement (an arrangement that explicitly establishes a right of title to the asset under the terms of the Personal Property Securities Act). In order to enhance the prioritisation of the securities, the collateral taker will almost always enter a proof of funding in the securities registry for private assets.

Registration details the borrower, the secured debtor and the securities. Furthermore, the protection buyer will, as far as possible, obtain ownership of the asset as the acquisition of ownership offers further benefits in terms of prioritisation. An assignee shall be considered to be in possession if he undertakes certain mandatory measures under the Securities Act for personal purposes.

If, for example, collateral allowances exist for the collateral arrangement, ownership is presumed to have been taken when the collateral taker acquires the allowances. Is it possible to provide collateral in the form of cash contributions? And if so, what are the most commonly used types of collateral for this type of ownership and what is the process?

Contributions in cash are considered private ownership, as is the law on securities for private ownership. Collateral is typically provided in the form of a general or special collateral arrangement (an arrangement that explicitly establishes a right of title to the asset under the terms of the Personal Property Securities Act). In order to enhance the prioritisation of the securities, the collateral taker will almost always enter a proof of funding in the securities registry for private assets.

Registration details the borrower, the secured debtor and the securities. Furthermore, the corresponding suspense accounts are often frozen until the secured party allows the payout. IP Can certainty be provided about IP? And if so, what are the most commonly used types of securities for this type of ownership and what is the process?

Protected intellectual properties are protected as well as the right to privacy under the provisions of the PC Securities Act. Collateral is typically provided in the form of a general or special collateral arrangement (an arrangement that explicitly establishes a right of title to the asset under the terms of the personal Property Securities Act). In order to enhance the prioritisation of the securities, the collateral taker will almost always enter a proof of funding in the securities registry for private assets.

Registration details the borrower, the secured party and the securities. It is also possible to file a safety note in the trademark, patent and utility model registries. What are the joint enforceability triggers for credits, safeguards and surety bonds? Frequent causes of execution are: bankruptcy (including insolvency-related incidents, such as bankruptcy administration); non-payment of a loan amount; violation of a trade deed ( but sometimes only when a substantiality level is exceeded or a cure deadline has expired); misstatement (sometimes only when a substantiality level is exceeded or a cure deadline has expired); in many cases cross-default; in many cases changes of control. 11.

Is there a set of special rules that have to be met by providers of credit? Most often, when a creditor has collateral for all of the borrower's assets, an insolvency administrator is nominated to realize the collateral and pay back the collateral taker. The Insolvency Administration Act 1993 regulates certain issues relating to the behaviour of the insolvency administrator (e.g. the insolvency administrator's liabilities to other secured creditors).

Otherwise, the collateral taker usually repossesses the secured interest and resells it to realize its debts. These proceedings are generally governed by the Personal Property Securities Act 1999 and there are certain legal process reqirements. The intent to resell must normally be disclosed to the obligor and other secured lenders and the collateral taker is required to obtain the best reasonably achievable consideration.

However, in some circumstances, the secured party can easily assert other contract related remedies equal to the enforcement of the collateral. Thus, for example, a lessee who is classified as safe may come back into possession under its leasing arrangement. The 2007 Real Estate Act provides for a procedure for the mortgage sales of real estate in the case of real estate.

Specifically, the mortgage debtor must be notified with mandatory information and there is an obligation to obtain the best possible value that can reasonably be obtained for the real estate. Bankruptcy order In which order do the lenders order in the bankruptcy of a debtor? As a general rule: secured believers come first; insecure believers come third.

With regard to some kinds of real estate (e.g. claims and inventories), preferred lenders may take precedence over secured lenders. The secured lender, however, is usually still at the top when he is a taker of a claim for a new value or is holding a PMSI (PurchaseMoneySecurity Interest ), which is basically a collateral right on real estate to protect the funds used to fund the acquisition of that real estate.

Usually, if this ownership was resold in return for a claim, the collateral taker also has a claim included in the claim as a result of a sale. Between the secured lenders, who are the secured owners of real estate, the general principle applies that the first individual who has entered a security right over real estate against this real estate has first precedence, the second has second precedence and so on.

Between the secured lenders, who are the secured owners, the regulations are more complicated. As a rule, the precedence depends on which secured lender first took delivery of the securities or whether he registered a related financial report in the securities registry for private individuals, but there are other regulations.

Most importantly, a PMSI usually has a higher precedence than other interests in the same securities.