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Types of contingent funding

ASSET BACKED FUNDING

The sponsor either funds the purchase of assets or transfers assets to a Special Purpose Vehicle (SPV) that is jointly owned by the sponsor and the trustee.

CHARGE OVER ASSETS

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

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