Security & Collateral · glossary
Security over a changing pool of assets, such as stock, which the Company may sell in its ordinary trade until the charge fixes. On an insolvency, three claims are paid from it before the Bank. Clause 3.4 also catches any asset whose fixed charge fails. Debenture §3.4 · Definition: Floating Charge Assets · Chapter 1 · Chapter 3
Explained in Chapter 1, What Security Is For, of Security & Collateral.
Also explained in Finance Deals & Syndicated Lending.
Clause 3 of the Debenture creates two kinds of charge. A fixed charge sits on a named asset, and the Company may not sell it without the Bank's consent. A floating charge sits over a pool of assets that changes every day, such as stock.Read Chapter 3, Fixed and Floating →
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the Security Assets for the time being subject to the floating charge in clause 3.4 and to no fixed security under this Debenture;Read the definition in the document →
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