How to improve trustee responses to bond defaults

摘要

One of the major boxes to tick when issuing a bond or other debt security is the appointment of a reputable and experienced trustee. They police the covenant and the security underpinning the bond. During periods of financial calm, while issuers continue to comply with their obligations set out in the various transaction documents, this part of the trustee's role is kept to a minimum. However, once an event of default or similar breach of covenant occurs and is not remedied within the timescale allowed under the trust deed, the trustee often has to act quickly to accelerate the bonds - carrying out the rapid collection of interest and principal and termination of the contract.