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Types of contingent funding

CHARGE OVER ASSETS

The scheme receives a fixed charge over a specific asset (or assets) of the sponsor.

NEGATIVE PLEDGES

A promise by the sponsor not to undertake certain actions, either without the consent of the trustees or without undertaking a connected triggered action.

Case studies

Using a negative pledge to safeguard an existing dividend policy.

Using a Group Company Guarantee to manage Section 75 debt risk with the bonus of a big PPF levy saving!

Using an upside mechanism and escrow to mitigate the adverse effect of the Corporate Insolvency and Governance Act 2020 (“CIGA”) on benefit security.

Using contingent contributions to achieve fairness across stakeholders