Introduction
Syndicated loan transactions are a common feature in the South
African loan market. As the agreements underlying the transaction
are often English law governed, a need arises to reconcile the
diverging systems of law (and practices) between the UK, other
jurisdictions and South Africa and, where that is not possible, to
find alternative means of arriving at the same result so as to
ensure consistency, predictability and commercial viability of such
transactions. This is particularly true for the provision of
security under the loan transaction.
Providing security in other jurisdictions
In the UK, a trust is used to hold security over the assets of a
debtor for the benefit of the lenders in a syndicated loan
transaction. The lenders (not as named individuals but as a
category of persons) are then appointed beneficiaries of the trust.
In practice, a specialised trust company is used for this purpose.
Often, the security interest held by the security
