Debt capital markets: trustees

Why have a trustee and a trust deed?

The most usual way to structure an issue of tradable, secured debt securities under English law is for the securities to be constituted by a trust deed and for either:

1. •

   a single trustee to hold both the issuer's covenant to make payment on the securities, and the security created by the issuer, on trust for the holders of the securities, or

2. •

   a note trustee to hold the issuer's covenant to make payment on the securities, and a separate security trustee to hold the security created by the issuer

There are three main ways to structure an issue of unsecured debt securities under English law:

1. •

   the securities may be constituted by a trust deed under which the trustee holds the issuer's covenant to pay on trust for the holders of the securities—in other words, similar to the trust deed for a secured issue, but without security

2. •

   a fiscal agent structure may be used