Document background
The Collateral Agreement is a crucial security document used in Saudi Arabian financing transactions where a party seeks to create a security interest over specific assets to secure financial obligations. It must be structured to comply with both Shariah principles and Saudi Arabian commercial laws, particularly the Commercial Pledge Law and SAMA regulations. The document is typically used in conjunction with various financing arrangements, from simple bilateral loans to complex syndicated facilities. It contains detailed provisions for the creation, perfection, and enforcement of security interests, along with necessary Shariah compliance declarations and Saudi-specific registration requirements. This document is essential for any secured financing transaction in Saudi Arabia and must carefully balance conventional security concepts with Islamic finance principles.
