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Institutional Trust and Loan Agency
Institutional Trust and Loan Agency
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Institutional Trust and Loan Agency

Institutional Trust and Loan Agency

For Agency, escrow, bond & security trustee services as well as employee share option plans

Agency

As an impartial third party, we play a crucial role in bridging the gap between the borrower and the lenders, ensuring that all parties in a syndicated loan transaction are protected in line with the documented agreements throughout the life of the syndicated loan.

What it offers you:

  • Corporates take advantage of the following services based on transaction dynamics which includes but not limited to the following:

Transaction monitoring for:

  • Fulfilment of conditions precedent.
  • Fulfilment of conditions subsequent
  • Covenant compliance
  • Information undertaking

Acting as distribution channel for funds to:

  • The borrower via a drawdown notice
  • The lenders via a repayment of capital or interest due
  • Fees remittance for transaction parties

Coordination of the transaction parties as it relates to:

  • Change in loan terms/ conditions
  • Partial sell down
  • Onboarding a new party
  • Exiting an existing member of the syndicate

Agent bank
Bond trustee
Bond Trustee

Our presence as a trustee in the bond transaction helps to promote investor's confidence and ensures probity and accountability to the issuer.

What it offers you:

As Bond trustees, we offer the following services:

  • Protecting the interest of bond holders
  • Satisfactory compliance with regulators
  • Fiduciary services such as:
    • Establishing the accounts related to the bond
    • Invoicing the issuer for debt service payments and holding funds until dispersed
    • Making interest (and ultimately principal) payments to bondholders.

Contact us for a discussion, to determine what you need

Employee Share Option Plan

We manage and administer schemes in which a corporate entity allocates some of its shares to some members of staff who have been instrumental to its development. This is usually done as means of incentive/encouragement.

What it offers you:

As Trustees to a share option scheme, we offer the following services based on transaction dynamics and dictates which includes but not limited to the following:

  • Elimination of conflict of interest
  • Transfer of the administrative stress to a trusted third party
  • Expert advice in structuring the scheme to suit the nature of business.

Contact us for a discussion, to determine what you need

Group Life Insurance
Escrow Agency
Escrow Agency

As the escrow agency, we perform the third-party role and hold an asset or document on behalf of a first-party for delivery to a second-party or beneficiary upon the occurrence of a condition or event specified in the escrow agreement.

What it offers you:

As escrow agents, we offer the following services:

  • Opening off-shore escrow accounts where required to hedge against foreign exchange losses
  • Multi-currency account opening and maintenance
  • Adherence to instructions (payment of authorized invoices and request for information) issued by the principals and parties to the transaction in a timely manner
  • Investing idle funds via a daily sweep arrangement to ensure no investment benefit is lost
  • Prompt reconciliation
  • Handling the funds and/or documents in accordance with the instruction
  • Periodic reporting to stakeholders in line with transaction dynamics and agreement.
  • Closing the escrow in accordance to instructions when and where required.

Contact us for a discussion, to determine what you need

Security Trustee

We hold, in trust, the collateral documents presented by contracting parties in any project or debt financing transaction. When the finance transaction is successfully completed, the trust is dissolved and the assets are returned to the borrower. However, if the finance transaction fails, the assets are liquidated and the proceeds are distributed to the creditors.

What it offers you:

As security trustees, we offer the following services:

  • Security of title documents/collateral which are held in trust
  • Prompt and accurate information on status of title documents to transaction parties as may be required
  • Provision of funding requirement of the Stamp duty escrow account
  • Compliance on insurance policy on security assets.

Contact us for a discussion, to determine what you need

Security trustee
Collective Investment Schemes (CIS)

We serve as trustees to different types of CIS to ensure adherence to Trust Deed terms and maintain oversight on the administration of the funds by fund managers. 

What it offers you:

As trustees, we offer the following services:

  • Monitor the activities of the fund manager and the custodian on behalf of and in the interest of unit holders and fund contributors/investors.
  • Ensure that the custodian takes into custody all the schemes' assets and holds it in trust for the beneficiaries in accordance with the Trust Deed and Custodial Agreement.
  • Monitor the register of unit holders and fund contributors/investors.
  • Ascertain compliance with the provisions of the Trustee Investment Act, Investments and Securities Act and the Trust Deed of the Fund Manager.
  • Ascertain that monthly and other periodic returns/reports relating to the scheme or fund are sent by the Fund Manager to the Commission.
  • Take all steps and execute all documents which are necessary to secure acquisition , investments or disposals properly made by the Fund Manager in accordance with the Trust Deed and Custodial Agreement.
  • Exercise any right of voting conferred on it as the registered holder of any investment and/or forward to the fund manager within a reasonable time all notices of meetings, reports, circulars, proxy solicitations and any other document of a like nature for necessary action;

Contact us for a discussion, to determine what you need

Bespoke Trust

As trustees we create hybrid trust schemes that are tailored to suit the needs of corporate clients. 

What it offers you:

As trustees, we offer the following services:

  • Ensuring that the scheme is managed by in accordance with the Investment Securities Act, rules and regulations, the schemes’ Trust Deed and custodial agreement etc.

Contact us for a discussion, to determine what you need

FAQs

  • What is a security trust structure/arrangement?
    A security trust is a legal arrangement where an independent third party (the Trustee) holds the security or collateral provided by a borrower for the benefit of a group of lenders in a loan transaction.
  • What are the inherent benefits of having a security trust in a lending arrangement as opposed to going to the bank directly and collateralizing directly with the lending institution?
    A security trust allows the borrower to provide a single charge or lien over the assets to a security trustee, who holds and manages them on behalf of the lenders. This allows the borrower to access loans from different lenders as much as the assets in the trust can cover. This can minimize the costs and complexities involved in creating multiple charges or liens for each lender, as well as registering and perfecting them at appropriate government agencies. In contrast, collateralizing an asset with a lending institution can lead to the under-utilization of the asset in accessing funds needed by the firm. The borrower may have to create separate charges or liens for each asset and each lender, which can be time-consuming, costly, and complicated.
  • What type of assets can be placed in the security trust?
    Cash, shares, equipments, lands and properties are assets that can be placed in a security trust. Assets to be placed in the trust are also subjected to the comfort of the lenders.
  • How do I transfer assets into the security trust?     
    The ownership of the assets can be transferred from the borrower to the security trustee to hold on behalf of the lenders. The perfection of these assets in favour of the security trustee will be done at the appropriate government agencies.
  • In accessing facilities for business expansion and growth by firms, how does a facility agent help expedite the transaction?
    The facility agent acts as a single point of contact between the borrower and the lenders, eliminating the need for multiple communications and negotiations between various parties. The facility agent also handles the transaction's administrative and operational components, such as interest and principal repayments. The facility agent also provides expertise and direction on the terms and conditions and ensures that all parties involved comply with the facility agreement.
  • What is the difference between a facility agent and a security trustee?
    A facility agent is different from a security trustee, who holds and enforces the security or collateral provided by the borrower for the benefit of the lenders. A facility agent, on the other hand, is an entity that acts as the representative of a group of lenders in a syndicated loan transaction. A facility agent handles the flow of funds between the parties and provides administrative & operational support to the transaction.
  • Does SITL acts as trustees to Collective Investment Schemes/Mutual Funds?
    SITL serves as a trustee to mutual funds and collective investment schemes.  We supervise the fund managers' management of the funds on behalf of the unitholders and ensure compliance with the trust deed and other applicable relevant regulations.
  • How does an escrow agency work?
    An escrow account is an account where a third party (Escrow Agent) holds funds or assets on behalf of two other parties who are involved in a transaction until the fulfilment of the agreed terms and conditions by both parties.
  • What are the benefits of setting up an escrow arrangement with SITL?
    An escrow arrangement protect the interests and rights of both parties in a transaction. For example, if you are purchasing or selling an asset, an escrow arrangement can ensure that the seller transfers the title and the buyer pays the agreed price before releasing the funds or assets to each other. This can prevent any fraud, misrepresentation, or breach of contract by either party. It also facilitates the completion and execution of a transaction. At SITL, we have the expertise in delivering excellent escrow service to our clients.
  • Does SITL act as trustees to Corporate and Sub National Bonds?
    SITL has a track record of offering trusteeship service to corporate bond and subnational bonds issued in the Nigerian capital market.
  • Does SITL offer Employee Share Option Plan for Firms who want to set up incentive schemes for their employees?
    Employee Share Option Plan (ESOP) is a scheme that enables employees to buy a certain number of shares in the company at a discounted price within a specified time period. SITL can act as the independent party that monitors the entry and exit of participants into the scheme. SITL will also allocate the shares to the eligible employees and ensure payment of the dividends to the participants. ESOPs are designed to motivate employees for their performance and encourage staff retention.