Debenture meaning

This checklist sets out the factors to consider when a company is proposing to grant a floating charge. This checklist proceeds on the basis that an English or Welsh company will grant a floating charge to a lender situated in England or Wales. The company granting the floating charge is the ‘chargor’. The entity receiving the floating charge is the ‘chargee’. The document recording the floating charge is the ‘security document’. For detailed guidance on the nature of floating charges and how they differ from fixed charges, see Practice Note: Fixed and floating charges. For the advantages and disadvantages of taking a floating charge, see Practice Note: Floating charges—advantages and disadvantages. For in-depth considerations when taking a floating charge, see Practice Note: Floating charges. A floating charge may form part of the security package created by a debenture—see Practice Note: Key features of debentures. Debentures typically also include other security interests, such as mortgages, assignments and fixed charges. A floating...

When taking a lease or a transfer from an administrative receiver, the title deeds should include the original debenture, or a certified copy, under which the receiver was appointed a certificate from the chargee (or their conveyancer) confirming the power of appointment under the debenture has arisen the original deed appointing the receiver, or a certified copy a certified copy of the receiver’s notice accepting the appointment (the original is retained by the chargee) HM Land Registry will need all of the above to register the lease or transfer. Although the debenture is usually noted against the property title, HM Land Registry will also verify that it: has been registered at Companies House has been duly executed contains provisions permitting the receiver’s appointment and the proposed disposition Checking the appointment An administrative receiver cannot be appointed under a debenture or charge dated after 15 September 2003, unless the security falls within one...

Scope of this Checklist This Checklist outlines the considerations when a company plans to grant a fixed charge. It assumes an English or Welsh company will confer multiple fixed charges on a lender located in England or Wales. In this Checklist: the company giving the fixed charge is the ‘chargor’ the recipient of the charge is the ‘chargee’ the instrument recording the fixed charge is the ‘security document’ Fixed charges may be created in a standalone security document or as part of the security within a debenture (see: Documentation required to create a fixed charge below). For further details, see: Practice Note: Fixed and floating charges. Preliminary questions before taking security by way of a fixed charge Is a fixed charge the appropriate method of taking security? A fixed charge may be granted by a company, a limited liability partnership, and other corporate bodies. It may also be granted...

Banking & Finance—April 2024 case round-up Binyon and another (as joint administrators of VE Global UK Ltd) v Suzerain Investment Holdings Ltd and others [2024] EWHC 749 (Ch) — Debenture—void—section 859H Companies Act 2006. The court held the debenture was void against the administrators under section 859H for non-registration. Companies House certificate for an amendment agreement did not assist: the amendment extended the debenture’s terms only and created no charge, while the security-creating debenture itself had not been registered. Perhar v Freestone and others [2024] EWHC 945 (Ch) — Challenge to appointment of administrators—implied term—debenture—enforceability of floating charge—event of default. The appeal from a decision implying an enforceability term to give the debenture business efficacy was allowed. Given the significance of such an implication, the legal and factual issues must be resolved at a full trial listed for November 2024. See: Sophie Rebecca Perhar v Louise Freestone Paul Mallatratt Synergy In Trade Ltd [2023] EWHC 2065 (Ch). Banking & Finance case tracker ...

Banking & Finance 2024 case round up Force majeure—shipping contract—reasonable endeavours RTI Ltd (Respondent) v MUR Shipping BV (Appellant) [2024] UKSC 18 This Supreme Court decision examines how a force majeure clause in a shipping contract between MUR Shipping BV (MUR) and RTI Ltd (RTI) should be interpreted. Such clauses excuse a party from performing when specified events outside the parties’ reasonable control (acts of God) occur. They frequently contain a ‘reasonable endeavours’ proviso, which prevents a party from invoking force majeure if the consequences could be averted by taking reasonable steps. The appeal turned on whether those reasonable endeavours required the party seeking to rely on force majeure to accept an offer of performance that did not match the contract terms. In this instance, the suggested alternative was payment in euros rather than US dollars. The Supreme Court unanimously allowed the appeal, ruling that MUR’s refusal to accept RTI’s non-contractual proposal did not amount to a failure to exercise reasonable endeavours...

Banking & Finance—December 2025 and January 2026 case round-up Skyros Maritime Corp and another company v Hapag-Lloyd AG ‘Skyros’ & ‘Agios Minas’ [2025] EWCA Civ 1529 Shipping finance—charterparty damages for late redelivery of vessels The Court of Appeal allowed the owners’ appeal from the Commercial Court concerning damages arising from the delayed redelivery of time‑chartered container ships. The vessels, ‘SKYROS’ and ‘AGIOS MINAS’, were returned late in breach of the charterparties by Hapag‑Lloyd, after the owners had already arranged to sell them. The central question was whether the owners could obtain substantial damages—calculated as the gap between market and charter rates—for the overrun period even though they had no plan to re‑fix the ships. The Court of Appeal confirmed they could. Applying the settled maritime principle, damages for late redelivery are assessed by reference to the market rate, irrespective of whether the owner would, in fact, have gone back into the market to secure a new fixture. When quantifying loss, the owners’ post‑redelivery plans were...

Practice Note This Practice Note sets out the principal drafting, negotiating and legal considerations for a typical bilateral debenture issued for a particular deal with a single security provider. It is equally applicable to syndicated and all monies debentures, and to arrangements involving several security providers. Here, the security provider is called the Chargor and the secured party the Lender. It also signposts answers to commonly asked questions. A debenture is commonly used when the lender seeks security over a company’s entire asset base. For introductory guidance on debentures—what a debenture entails and who may grant one—see Practice Note: Key features of debentures. For broader guidance on preparing and negotiating security documents, including selecting an appropriate precedent and early-stage considerations, see Practice Note: How to draft and negotiate security documents in loan transactions. Debentures vary in structure, yet they tend to share similar provisions and usually adopt a common core format. For ease of use, the corresponding clause references are included in our Debenture: single company chargor—bilateral—specific monies. This...

This How to guide sets the groundwork for drafting and negotiating a security document. It links to helpful precedents and highlights key drafting and negotiation points. Practice Note: Introductory guide to security in a lending transaction gives a fuller overview of taking and perfecting security, covering types of security, perfection and priority. Practice Note: Debenture drafting and negotiation guide provides detailed guidance on drafting and negotiating a debenture. Parties The parties to a security document in a bilateral transaction will be: the security provider(s)—eg the borrower(s) under the facility agreement or a third party, such as group company guarantors or a parent company, or both; and the lender The parties to a security document in a syndicated transaction will be: the security provider(s)—the borrower(s) under the facility agreement or a third party, such as the group company guarantors or a parent company, or both; and the security agent, acting as trustee and security agent for the lenders...

FORTHCOMING CHANGE relating to the modernisation of stamp taxes on shares framework: From 2027, stamp duty and SDRT will be superseded by a single, self-assessed charge on securities—the securities transfer charge (STC)—with payment and reporting handled via a new online portal. In substance, the STC is intended to reflect, in large part, the options trailed in the 2023 consultation. Finance Bill 2026 (FB 2026) includes a power, commencing on Royal Assent, to permit secondary legislation that will allow taxpayers to trial the digital service by self-assessing their stamp taxes on securities liabilities and by submitting details of transactions electronically through that digital platform. Further background on the programme to modernise stamp taxes on securities can be found in: News Analyses: Budget 2025—Tax analysis—Stamp and transfer taxes; Tax update spring 2025—Stamp taxes on shares modernisation; Tax update spring 2025—Tax analysis—Stamp and transfer taxes; TAMD 2023—Stamp taxes on shares modernisation; TAMD 2023—consultation—stamp taxes on shares; and Tax Administration and Maintenance Day—27 April 2023—Stamp and transfer taxes...

General This Precedent serves for a complete security release and is designed for bilateral debentures or mortgage instruments, where the chargor is a company registered in Ireland, and is intended for use in relation to that specific documentation. Such releases are ordinarily recorded by a deed of release, which is the usual means of documenting the discharge of a mortgage or charge. That approach matters especially if security is discharged early or before the debt is fully satisfied, as it removes arguments about absence of consideration and assures any third party dealing with the security provider that the release is valid. A complete release is appropriate where the creditor no longer needs security to remain in place, for instance when every liability owed to the security holder is being paid off or refinanced by a different lender. If a full release occurs, the security provider’s obligations and liabilities are likewise discharged...

[ To be printed on the headed paper of the SOLICITORS acting for the lender ] [ insert date ] To: [ insert name and address of the solicitors acting for the Chargor ] Dear [ insert organisation name ], We write in relation to the [ debenture OR mortgage ] dated [ insert date of [ debenture OR mortgage ] ] entered into between [ insert name of chargor ] (the Chargor) and [ insert name of lender ] (the Lender) (the [ Debenture OR...

This Deed is dated [ insert date ] 20[ insert year ] Parties [ Insert name of Chargor ], a company registered in England and Wales (number [ insert company number ]) whose registered office is at [ insert address ] (the Chargor); and [ insert name of Lender ] of [ insert address ] (the Lender). Recitals The Lender makes facilities available to the Chargor under various finance arrangements. The availability of those facilities is conditional upon the Chargor entering into this Deed in favour of the Lender...