Last year, our law firm advised a syndicate of banks in connection with the structuring of and security for a credit facility granted to a Spanish corporation (the "Borrower") to finance the construction and delivery of a telecommunication network (the "Facility") by a Spanish supplier (the "Supplier").
The aim of the deal was to put in place retention of title arrangements whereby the Lenders would hold the right to retain title to the equipment financed under the Facility. The structure can be used to take security on any other equipment being financed, without the bureaucratic and cost constraints of other more classic securities such as mortgages or pledges.
This paper analyses the validity and enforceability of retention of title arrangements under Spanish law. It is aimed at highlighting the main legal concerns in respect of retention of title arrangements.
