Revolving Credit Deed Of Trust Template for England and Wales

A Revolving Credit Deed of Trust is a sophisticated financing document that combines a revolving credit facility with a trust structure for holding security under England and Wales law. This arrangement allows multiple lenders to participate in a credit facility while having their security interests professionally managed by an appointed trustee. You'll find this structure particularly valuable when dealing with syndicated lending arrangements or facilities where the composition of lenders may change during the facility's term.

When do you need this document?

You need a Revolving Credit Deed of Trust when establishing syndicated credit facilities where multiple financial institutions participate as lenders. This structure is essential for large corporate borrowings, property development financing, or acquisition facilities where the borrower requires flexible access to funds over time. The document becomes particularly important when lenders may join or leave the syndicate during the facility's life, as the trustee arrangement ensures continuity of security without requiring multiple security registrations. You'll also require this structure when the underlying security is complex, involving multiple assets or jurisdictions, as it centralizes security administration and enforcement.

Key legal considerations

The trust declaration must comply with the three certainties required under English law: certainty of intention, subject matter, and objects. You need to ensure the trustee has adequate powers to hold and enforce security on behalf of all lenders, including powers of sale and appointment of receivers. The facility terms must clearly define the revolving nature of the credit, including commitment periods, utilization procedures, and repayment mechanisms. Security provisions require careful drafting to ensure they create valid legal and equitable charges over the relevant assets. You must also consider the ranking of security interests and any intercreditor arrangements with other debt facilities. The document should address trustee indemnification, conflicts of interest, and replacement mechanisms to ensure robust governance.

Legal requirements in England and Wales

Under the Law of Property Act 1925, legal estates in land can only be held by a maximum of four trustees, requiring careful consideration of trustee appointments. The Trustee Act 2000 imposes statutory duties of care and investment powers that must be addressed in the trustee's appointment terms. If the facility involves regulated lending activities, compliance with the Financial Services and Markets Act 2000 and associated regulations is essential. Consumer Credit Act 1974 requirements apply if any part of the facility constitutes regulated consumer credit. Security over company assets requires registration at Companies House under the Companies Act 2006 within 21 days of creation. The document must comply with FCA regulations if the facility agent or security trustee conducts regulated activities, and proper legal opinions may be required to confirm the validity and enforceability of the security arrangements.