How independent are bond trustees?
Banks can act as the trustee on bonds that they are taking to market. Since trustees are expected to represent the bondholders in any dispute, this dual role has prompted concerns over independence. Laurence Neville reports
An Association of British Insurers (ABI) proposal to improve UK corporate bond market standards has provoked a debate on the independence and role of bond trustees. The debate reflects growing concern at the strength of investment bank-affiliated players in the market and, in extreme circumstances, questions where their allegiance lies.
The role of trustee under UK law is substantial, with appointees – there is usually only one per deal – able to exercise a measure of discretion unlike in the US
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