Security Trust

As Security Trust, Fiducie is the most robust form of pledge under French law.

Fiducie is an operational tool with no equivalent in terms of risk-mitigation. It forms a bankrupcty-remote security package that offers strong protection in the context of involvency proceedings:

• Its enforceability rests on the transfer of the full ownership from the settlor to the trustee.
• The transfert of assets into a fiducie is fiscally neutral and involves reduced taxation and transaction costs.
• The fiducie is totally bankruptcy-remote. It is protected from any alienation by the grantor or its creditors and is kept isolated from the trustee’s own property and from all other fiducies.

Because security trust is such a strong risk-mitigation tool, it offers lenders the possibility to get exposure to more complex and exposed cases.

• The scheme is very flexible as several assets, including liabilities, may be grouped within the same fiducie.
• It is managed according to a tripartite convention which details the rights and obligations of the parties. Its execution does not require any outside intervention.

• Upon an event of default, the fiducie assets are sold or transferred to the beneficiary with no delay and without requiring any legal action (provided that rights and obligations of the parties in the contract respect certain caracteristics).
• The lender secured by a fiducie can not be forced into granting debt write-offs.
• The lender secured by a the fiducie is senior on the fiduciary assets over all other creditors including privileged creditors.
• Provided that the asset held in the fiducie are greater than the secured debt, the lender will not be classified as an affected party as defined in the Restructuring Directive of June 20, 2021.