{"id":140868,"date":"2026-04-27T11:58:33","date_gmt":"2026-04-27T11:58:33","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=140868"},"modified":"2026-05-05T14:18:33","modified_gmt":"2026-05-05T14:18:33","slug":"bermuda-lending-secured-finance","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/bermuda-lending-secured-finance\/","title":{"rendered":"Bermuda: Lending &amp; Secured Finance"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-140868","comparative_guide","type-comparative_guide","status-publish","hentry","guides-lending-secured-finance","jurisdictions-bermuda"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Wakefield Quin<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2022\/03\/Logo-1.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Wakefield Quin<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2022\/03\/Logo-1.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Lending &amp; Secured Finance laws and regulations applicable in Bermuda<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do foreign lenders (including non-bank foreign lenders) require a licence\/regulatory approval to lend into your jurisdiction or take the benefit of security over assets located in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are no restrictions on foreign lenders granting loans to Bermuda companies unless the foreign lender is carrying on business in or from within Bermuda, which may require licensing or registration depending on the nature of the activities. There are restrictions on foreign lenders taking security over certain Bermuda property, including mortgages over Bermuda real estate and charges over shares or other securities of Bermuda companies.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any laws or regulations limiting the amount of interest that can be charged by lenders?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Bermuda does not have any usury laws that limit the amount of interest that can be charged by lenders.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any laws or regulations relating to the disbursement of foreign currency loan proceeds into, or the repayment of principal, interest or fees in foreign currency from, your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No such restrictions apply to exempted companies as a general matter. Bermuda maintains an exchange-control regime, but exempted companies are generally designated non-resident for exchange-control purposes and may deal freely in currencies other than Bermuda dollars. Accordingly, there are generally no Bermuda exchange-control restrictions on the disbursement of foreign-currency loan proceeds to, or the payment of principal, interest or fees by, an exempted company under loan, guarantee or security documents.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can security be taken over the following types of asset:  i.\treal property (land), plant and machinery; ii.\tequipment; iii.\tinventory;  iv.\treceivables; and v.\tshares in companies incorporated in your jurisdiction.               If so, what is the procedure \u2013 and can such security be created under a foreign law governed               document?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><h4>Real Property, plant and machinery:<\/h4>\n<p>Security over real property in Bermuda is typically granted by way of either a legal mortgage (executed as a deed), where legal title is transferred to the mortgagee (or lender), or an equitable mortgage (executed under hand), where a charge is established without title being transferred to the mortgagee.\u00a0 Security over plant, machinery and equipment is generally taken by way of a fixed charge or chattel mortgage.<\/p>\n<p>Pursuant to the Land Title Registration Act 2011 (the \u201c2011 Act\u201d), the grant of a first legal mortgage over unregistered land triggers compulsory first registration of title to the relevant real property. The mortgage or charge, together with supporting title documentation, must be lodged with the Land Title Registry Office (the \u201cLTRO\u201d). Compulsory first registration does not arise on every equitable mortgage or charge; the trigger should be checked by reference to the nature of the estate and transaction.<\/p>\n<p>Upon first registration, a mortgagee\u2019s priority is established on the property register. Priority is based on the date of submission of the application for registration to the LTRO. The 2011 Act provides for the conversion of legal mortgages into registered charges, with title vested in the mortgagor and the mortgagee holding a registered charge only. This system replaces the historical regime, which required that any legal mortgage or charge be registered in the Book of Mortgages in order to protect a mortgagee\u2019s priority position.<\/p>\n<p>Both legal mortgages and charges attract stamp duty, generally at the rate of 0.5% of the principal sum secured.<\/p>\n<p>There are special rules that apply if an overseas or exempted company wishes to hold a mortgage over real property in Bermuda, including obtaining the prior consent of the Minister of Finance or other applicable governmental permission under Bermuda\u2019s landholding regime. If a mortgage taken by an overseas or exempted company is subsequently enforced, any land obtained by such company (as mortgagee in possession), must be sold within five years to either a person or entity having Bermudian status or to another licensed party.<\/p>\n<p>In relation to a fixed charge over plant, machinery and equipment, registration is not required to create or perfect the security interest; however, registration is recommended to establish priority at the Registrar of Companies (\u201cROC\u201d). Upon registration, and to the extent Bermuda law governs priority, the charge will take priority over any unregistered charges and any subsequently registered charges. Failure to register will not invalidate the charge, but may adversely affect its priority.<\/p>\n<h5>Equipment:<\/h5>\n<p>Security is granted over equipment by way of fixed charge or chattel mortgage.<\/p>\n<h5>Inventory:<\/h5>\n<p>The most common form of security taken over inventory is a floating charge, due to the fluctuating nature of inventory.<\/p>\n<h5>Receivables:<\/h5>\n<p>Collateral security can be granted over receivables by way of fixed and floating charge and\/or assignment.<\/p>\n<p>Assignments can be either legal or equitable. Legal assignments must be in writing, signed by the assignor and unconditional and written notice must be provided to the debtor. An equitable assignment will result if any of these requirements are not met.<\/p>\n<p>Under a legal assignment, the assignee can sue in its own name and the debtor can only discharge its obligations as instructed by the assignee.<\/p>\n<h5>Shares in companies incorporated in Bermuda.<\/h5>\n<p>Security over shares of Bermuda companies is usually granted by way of a share charge. It is uncommon for legal mortgages to be created, although share charges usually provide the chargee with the right to create a legal mortgage upon the occurrence of certain events.<\/p>\n<p>It is customary for certain ancillary documents to be delivered to the chargee under a share charge including an executed but undated share transfer form, any current share certificates, undated letters of resignation from each of the directors, irrevocable voting proxies and an undertaking from the Bermuda company to register all transfers of charged shares submitted to the company for registration.<\/p>\n<p>Bermuda no longer operates an exchange control regime in relation to shares of Bermuda companies. This framework has been superseded by obligations under the Beneficial Ownership Act 2025. In practice, for most commercial financing transactions involving exempted companies, specific consent or beneficial ownership registration is not required, and any applicable compliance requirements are typically administered by Bermuda licensed corporate service providers.<\/p>\n<h5>Security created under a foreign law governed document:<\/h5>\n<p>With certain exceptions, it is possible to grant security under foreign law governed documents. However, the creation, perfection, priority and enforcement of security over Bermuda-situs assets, and registration of charges over assets of Bermuda companies, should be considered under Bermuda law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a company that is incorporated in your jurisdiction grant security over its future assets or for future obligations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no issue granting security over future assets. Security over future property will generally be effected by a floating charge, although fixed security may attach to such assets automatically upon acquisition depending on the terms of the security document.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a single security agreement be used to take security over all of a company\u2019s assets or are separate agreements required in relation to each type of asset?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A debenture or fixed and floating charge is typically used to grant security over all of a company\u2019s assets.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any notarisation or legalisation requirements in your jurisdiction? If so, what is the process for execution?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>With limited exceptions, there are no notarisation or legalisation requirements in relation to the granting or perfection of security interests.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any security registration requirements in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In relation to real property, a mortgagee\u2019s priority position is established on the property register at the LTRO. Priority is based on the date that an application for first registration is submitted to the LTRO. The 2011 Act also operates to automatically convert a legal mortgage into a registered charge (meaning that title is returned to the mortgagor by way of a statutory vesting and the mortgagee comes to own a registered charge (only), rather than title to the real property in question). This system replaces the historical regime, which required that any legal mortgage or charge be registered in the Book of Mortgages in order to protect a mortgagee\u2019s priority position.<\/p>\n<p>It is not necessary for the validity or enforceability of most security documents that they be registered in Bermuda. However, if a security document creates a charge over assets of a Bermuda company, it is recommended that it be registered in the Register of Charges at the ROC. On registration, to the extent Bermuda law governs the priority of a charge, such charge will have priority in Bermuda over any unregistered charges, and over any subsequently registered charges. Priority is based on the date and time that an application for registration is submitted to the ROC. Registration is therefore principally a priority protection step, rather than a perfection requirement for validity.<\/p>\n<p>Specific security registration regimes apply for security over Bermuda ships, aircraft and aircraft engines registered in Bermuda.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any material costs that lenders should be aware of when structuring deals (for example, stamp duty on security, notarial fees, registration costs or any other charges or duties), either at the outset or upon enforcement? If so, what are the costs and what are the approaches lenders typically take in respect of such costs (e.g. upstamping)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Stamp duty rarely applies to documents that are executed by Bermuda companies engaged in international business. However, legal mortgages and charges on Bermuda property (e.g. real estate, shares of local companies and other property situated in Bermuda) attract stamp duty generally at the rate of 0.5% of the principal sum secured.<\/p>\n<p>LTRO fees are also payable on first registration of real property and on registration of a charge against registered title<\/p>\n<p>With limited exceptions, stamp duty is payable on documents executed by local companies.<\/p>\n<p>A fee of $200 is payable for registering a charge atover the assets of a local company. For an exempted or overseas company, $400 is payable where the amount secured is $1,000,000 or less and $700 where the amount secured is over $1,000,000. There is also a fee of $100 for registering a satisfaction of a charge at the ROC.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a company guarantee or secure the obligations of another group company; are there limitations in this regard, including for example corporate benefit concerns?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A company may guarantee borrowings of members of its corporate group provided the company has capacity to provide such guarantees and there is a sufficient corporate benefit to the company, which may be in the form of a benefit to the corporate group. Directors should also satisfy themselves that approving the guarantee or security is consistent with their statutory and fiduciary duties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions against providing guarantees and\/or security to support borrowings incurred for the purposes of acquiring directly or indirectly: (i) shares of the company; (ii) shares of any company which directly or indirectly owns shares in the company; or (iii) shares in a related company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no general prohibition or restriction on financial assistance, but loans to directors or security in favour of director loans (or loans to persons connected to a director) are restricted.<\/p>\n<p>Without the consent of the members of the company holding shares with 90% of the voting rights, it is unlawful for a company to make a loan, enter into a guarantee or provide security in connection with a loan to a director of the company or its holding company (or to certain persons connected with such director) except in certain limited circumstances.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can lenders in a syndicate (or, with respect to private credit deals, lenders in a club) appoint a trustee or agent to (i) hold security on the lenders\u2019s behalf, (ii) enforce the lenders\u2019 rights under the loan documentation and (iii) apply any enforcement proceeds to the claims of all lenders in the syndicate?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A Bermuda court would recognise the role of a security agent or trustee and allow the agent or trustee to hold security on the syndicate\u2019s behalf, to enforce the loan documentation and collateral security and to apply the proceeds from the collateral to the claims of all the lenders pursuant to the terms of the applicable intercreditor, loan and security documentation. A security agent need not be registered, licensed or otherwise qualified in Bermuda solely by reason of acting in that capacity.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If your jurisdiction does not recognise the role of an agent or trustee, are there any other ways to achieve the same effect and avoid individual lenders having to enforce their security separately?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Bermuda law recognises agent and trustee relationships.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do the courts in your jurisdiction generally give effect to the choice of other laws (in particular, English law) to govern the terms of any agreement entered into by a company incorporated in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Bermuda courts will give effect to the choice of foreign law as the governing law of a contract, provided that: (i) the point is specifically pleaded; (ii) the choice of law is valid and binding under foreign law; and (iii) recognition would not be contrary to public policy under Bermuda law. Where the foreign governing law of a contract is the laws of England and Wales, Bermuda courts are very comfortable enforcing such contracts.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do the courts in your jurisdiction generally enforce the judgments of courts in other jurisdictions (in particular, English and US courts) and is your country a member of The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (i.e. the New York Arbitration Convention)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The procedure for enforcing a judgment of a foreign court in Bermuda depends on the jurisdiction in which the judgment was obtained.<\/p>\n<p>A final and conclusive judgment in a US court against a Bermuda company, based on a contract under which a sum of money is payable (not being in respect of multiple damages, or a fine, penalty, tax or other charge of similar nature) (a Money Claim), may be enforced in Bermuda under the common law doctrine of obligation by action for the debt, provided that (a) the US court was competent to hear the action in accordance with private international law principles as applied in Bermuda, and (b) the judgment is not contrary to public policy in Bermuda, has not been obtained by fraud, or in proceedings contrary to natural justice and is not based on an error in Bermuda law.<\/p>\n<p>The Judgments (Reciprocal Enforcement) Act 1958 applies to judgments obtained in England. A final conclusive judgment in respect of a Money Claim obtained against a Bermuda company in the superior courts of England will be enforceable in Bermuda without the necessity of any retrial of issues or any re-examination of underlying claims, provided that the judgment: (a) is final and conclusive (notwithstanding that an appeal may be pending against it or that it may still be subject to an appeal in England); (b) has not been given on an appeal from a court in England that is not a superior court in England; and (c) is duly registered in the Supreme Court of Bermuda.<\/p>\n<p>Additionally, a foreign judgment against a Bermuda company may form the basis of a statutory demand, even if the judgment has not been registered as a judgment under Bermuda law, provided that the jurisdiction of the foreign court is not disputed on genuine grounds. Non-payment of such statutory demand may form the basis for an application to wind- up the Bermuda company, subject to the court\u2019s discretion.<\/p>\n<p>Bermuda is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and recognises awards made under arbitration agreements in a foreign jurisdiction that is also party to the New York Convention. If a foreign arbitral award is given against a defaulting debtor company as a result of arbitration in a \u201cconvention\u201d jurisdiction, Bermuda\u2019s International Conciliation and Arbitration Act 1993 (ICAA) provides that the award may be enforced in Bermuda either by action or, with leave from the court, in the same way as a judgment or order to the same effect. The enforcing party must make an application for leave (with or without notice) under section 48 of the ICAA, regardless of the jurisdiction in which the award was made and (where leave is given) judgment can be entered in terms of the award, without re-examination of its merits. On an ex parte application where leave has been granted to enforce the award, the order will not allow enforcement until the other party has 14 days to respond and bring an application to set the award aside. The 14-day response period is increased in certain circumstances.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What (briefly) is the insolvency process in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are six principal Bermuda insolvency and restructuring procedures commonly relevant to a Bermuda company:<\/p>\n<ol>\n<li style=\"list-style-type: none\">\n<ol>\n<li>Compulsory Winding-Up: A Bermuda company can be compulsorily wound-up by the Supreme Court of Bermuda pursuant to section 161 of the Companies Act 1981 including on the grounds that the company is unable to pay its debts;<\/li>\n<li>Creditors\u2019 Voluntary Winding-Up: A Bermuda company can be wound-up pursuant to a creditors\u2019 voluntary liquidation which is begun by the company itself passing a resolution of its shareholders;<\/li>\n<li>Provisional Liquidation: An application can also be made to appoint a provisional liquidator with a view to reorganizing and\/or restructuring a Bermuda company to avoid winding up. This is a flexible rescue mechanism, akin to Chapter 11 in the US or administration in the United Kingdom, and provides protection from creditors during the procedure.<\/li>\n<li>Scheme of Arrangement: Pursuant to sections 99 and 100 of the Companies Act 1981, a Bermuda company and its creditors or members (or any class of them) can enter into a compromise or arrangement, which must be sanctioned by the Supreme Court of Bermuda;<\/li>\n<li>Receivership: A receiver or manager can be appointed over the property (or any part of the property) of a Bermuda company pursuant to the powers of appointment contained in an instrument or by order of the Supreme Court of Bermuda; and<\/li>\n<li>Voluntary Arrangement: A Bermuda company can enter into an informal voluntary arrangement involving a consensual compromise with its creditors.<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What impact does the insolvency process have on the ability of a lender to enforce its rights as a secured party over the security?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A secured party\u2019s remedies in respect of its collateral would generally not be subject to an automatic stay merely because winding-up proceedings have commenced, although a stay may arise in certain circumstances, including where provisional liquidators are appointed. However, winding-up proceedings against a Bermuda company may affect the ability of a lender to enforce its rights as underlying transactions may be attacked. Please see question 18.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please comment on transactions voidable upon insolvency.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Any conveyance, mortgage or other act relating to property made by or against a Bermuda company within six months prior to the commencement of its winding up, will be invalid if it was made with the intent to prefer one creditor over the other company\u2019s creditors at a time that the company was unable to pay its debts as they became due.<\/p>\n<p>Under the fraudulent conveyance provisions under Bermuda\u2019s conveyancing legislation, a creditor may seek to set aside a disposition of property (including the creation of a security interest), if the disposition was made in circumstances where the transferor\u2019s dominant purpose was to put the property beyond the reach of a person (or class of persons) who is making, or may make, a claim against the transferor and the disposition was at an undervalue. Such a claim can only be made by an \u201celigible creditor\u201d, which is a person who: (i) is owed a debt by the transferor within two years after the disposition; (ii) on the date of the disposition is owed a contingent liability by the transferor, where the contingency giving rise to the obligation has occurred; or (iii) on the date of the action to set aside the disposition, is owed an obligation arising from a cause of action which occurred prior to or within two years after the date of the transfer.<\/p>\n<p>In relation to floating charges, where a Bermuda company is being wound up, a floating charge created within 12 months of the commencement of the winding up will, unless it is proved that such Bermuda company immediately after the creation of the charge was solvent, be considered invalid.<\/p>\n<p>From the commencement of a winding up of a Bermuda company, the liquidator may, with leave of the Supreme Court of Bermuda, disclaim any of the company\u2019s property that the liquidator believes to be onerous for the company to hold or is unprofitable or unsaleable.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is set off recognised on insolvency?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Where there are mutual credits, mutual debts or other mutual dealings between the company and a creditor at the time of the winding up order, the sum due from the one party shall be set off against any sum due from the other party and only the balance will be payable as a single obligation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any statutory or third party interests (such as retention of title) that may take priority over a secured lender\u2019s security in the event of an insolvency?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Certain debts are preferred by statute in Bermuda but only over claims of unsecured creditors and claims of secured creditors who are holders of floating charges. None of these debts are preferred over fixed charges, subject to limited statutory exceptions.<\/p>\n<p>Certain regulatory bodies in Bermuda, such as the BMA and the Regulatory Authority of Bermuda, could in certain circumstances investigate the affairs of an insolvent company and exercise such regulatory powers as they deem appropriate. The relevance of such powers will depend on whether the company operates in a regulated sector.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any impending reforms in your jurisdiction which will make lending into your jurisdiction easier or harder for foreign lenders?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are no impending reforms that are expected to change the existing regulatory or legal environment for foreign lenders. However, lenders should continue to monitor Bermuda\u2019s evolving beneficial ownership, economic substance, anti-money laundering, sanctions and regulatory frameworks where the borrower or obligor is regulated or part of a regulated group.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What proportion of the lending provided to companies consists of traditional bank debt versus alternative credit providers (including credit funds) and\/or capital markets, and do you see any trends emerging in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Bermuda is an international financial centre and Bermuda companies are regularly involved in a variety of cross-border structures and transactions, the majority of which originate in other major jurisdictions. It is not uncommon to see credit facilities being made available by alternative credit providers. Fund finance, insurance-linked lending, asset-backed structures and private credit transactions remain significant areas of activity for Bermuda vehicles.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please comment on external factors causing changes to the drafting of secured lending documentation and the structuring of such deals such as new law, regulation or other political factors<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There have been no recent amendments to Bermuda\u2019s Companies Act 1981 that materially affect the rights of secured parties or the core drafting of Bermuda secured lending documentation, although lenders should continue to monitor legislative and regulatory developments.<\/p>\n<p>The transition from LIBOR to alternative risk-free rates, including SOFR for US dollar financings, is now largely complete. However, legacy facilities, amendments and refinancing transactions may still require careful review of benchmark-replacement, fall-back and market-disruption provisions.<\/p>\n<p>Bermuda-related secured lending structures continue to be influenced by international regulatory, tax, sanctions, anti-money laundering, beneficial ownership, economic substance and ESG developments, particularly where Bermuda obligors form part of wider cross-border groups or regulated insurance, funds, securitisation, asset-backed or capital markets structures. Developments in international regulatory standards and cross-border financing practices continue to drive incremental changes in documentation and structuring approaches.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">4010<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/140868","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=140868"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}