Floating Deed Of Trust Template for Philippines

The Floating Deed of Trust is a crucial financing instrument in the Philippine legal system, designed to facilitate commercial lending while providing security over a company's changing asset base. This document type is particularly valuable when businesses need to secure financing while maintaining operational flexibility, as it allows the grantor to continue trading and dealing with assets in the ordinary course of business until a specified crystallization event occurs. The document must comply with Philippine law requirements, including the Civil Code, Property Registration Decree, and Trust Code, and typically includes detailed provisions on the creation of the security interest, trustee powers, grantor obligations, and enforcement mechanisms. It's commonly used in working capital financing, trade finance, and general corporate lending, offering lenders security while allowing borrowers to manage their business assets effectively. The structure accommodates both bilateral and syndicated lending arrangements, with specific provisions for registration, priority, and enforcement under Philippine jurisdiction.

1. Parties: Identification of the Grantor (borrower/debtor), Trustee, and Beneficiary (lender/creditor), including their complete legal names, addresses, and registration details

2. Background: Recitals explaining the context of the deed, including reference to any underlying loan or credit facility, and the intention to create a floating security

3. Definitions: Comprehensive definitions of terms used throughout the deed, including specific definitions for floating charge, secured assets, enforcement events, and crystallization

4. Creation of Trust: Express declaration creating the trust and specifying its floating nature, including the scope of assets covered

5. Trust Property: Description of the assets subject to the floating charge, including present and future assets

6. Powers and Duties of Trustee: Detailed outline of trustee's responsibilities, powers, and limitations

7. Grantor's Covenants: Obligations of the grantor including maintenance of assets, reporting requirements, and restrictions on disposal

8. Crystallization Events: Specific circumstances that will cause the floating charge to crystallize into a fixed charge

9. Enforcement: Procedures and rights for enforcing the security upon default or crystallization

10. Representations and Warranties: Standard representations regarding authority, ownership, and capacity

11. Term and Termination: Duration of the trust and conditions for termination

12. General Provisions: Standard clauses including notices, amendments, governing law, and dispute resolution