Security trustee structure overview

Using a dedicated security trustee company to hold the first legal charge over a property, where more than one lender is participating in a loan, is both good practice and a well proven arrangement that has many benefits for all concerned. More information on the benefits of this arrangement are outlined below, but first how does it work?

Prospect Capital Security Trustees Ltd (PCST), is a UK-registered company that exists purely to hold the first legal charge on behalf of all participants in a loan. The company never has, and never will trade, as it exists purely to fulfil the role of security trustee on behalf of all funders, including Prospect Capital.

On completion of each loan a first legal charge is registered in the name of PCST (instead of each individual funder) which is held by it on behalf of all funders.

Prior to completion a deed of priority is signed by Prospect Capital which clearly states that Prospect Capital is subordinating to the other funders who all sit pari passu with each other. This is the case if the loan involves one or more co-funders. All co-funders therefore effectively share a joint first charge with Prospect Capital sitting behind them.