The Trust Co. acts as trustee for private and public issues of debentures, including Liability Certificates and Basket Certificates.
The Securities Law provides that a Trustee must be appointed for all debentures issues.
The Trust Co. comes into the picture when the issuing company, its underwriters or lawyer, approaches it with a request that it agrees to be appointed as the Trustee.
The Trust Co.'s agreement to act as trustee is subject to various criteria, e.g. the company's 'obligo' in Bank Leumi, in order to ascertain whether it can act as trustee in accordance with the requirements of the law and of the Securities Authority.
Following its agreement to serve as Trustee, the Trust Co. and the issuing company sign a Trust Deed which insures and protects the rights of the debenture holders and sets out the functions of the trustee within the framework of the trust. The principals of the Trust Deed are available to the public in the prospectus published for the issue.
In cases where the issuing company mortgages its assets to safeguard the debenture holders' rights, those assets are registered in the Trustee's name.
In addition, during the 'life' of the debentures, the Trust Co. regularly checks the activities of the issuing company to ensure that the value of the mortgaged assets is adequate, examines the balance sheets of the issuing company and, if required, initiates a meeting of the debenture holders.
The Trust Co. also acts a trustee for private issues of debentures issued for institutional investors and also for issues of structured bonds and other financial instruments.
