A security package answers one question.

A security package is presented as a list. Share pledges at three layers. An assignment of receivables. A mortgage over the asset. A charge over the bank accounts. Guarantees from the holding companies. An assignment of the insurances. A pledge of the shareholder loans. The list is long because each item was added by a different adviser for a different reason, in a different jurisdiction, and its length is read as strength by everybody who has not tried to enforce one. It is not strength. Length is a list, and a list is tested by asking one question of each item, and the package is worth the best answer any item gives, which is usually the answer of one item at the bottom of the chain.

This note sets out the question and why it is the only one, how each item on a typical list answers it, where the answer lives and who can give it, how the package is weighted between the fund and the asset, the enforcement routes in the three Gulf states and the centres, the lender's pricing of the shortest route, the intercreditor between the items, a comparison, a worked package as a type, cases, what each party holds, the sequence, questions, terms and what to read.

The question

Who would take possession, of what, through which court or process, in which country, and how long it would take from default to possession. An item on the list that cannot answer is decoration. A share pledge over a company in a jurisdiction where the pledge cannot be enforced without a court order that takes three years is a three-year item. A mortgage over an asset in a state with an out-of-court enforcement route and a registry that records it is a six-month item. A guarantee from a company with no assets is an item with no answer. The package is the shortest route in the list to the thing of value, and the lender prices the package on that route and nothing else.

The question is the only one because it is the question the lender's credit committee asks, the question the lender's counsel answers in its enforcement memorandum, and the question a borrower's counsel should have answered before offering the list. Every other attribute of a security document, its governing law, its drafting, its warranties, matters only as it bears on the answer, and a document that bears on it not at all is a document that should not have been drafted.

How each item answers

A mortgage or a charge over the asset itself, in the state the asset sits in, perfected in that state's registry, answers with that state's enforcement route: an out-of-court route where the state has one, an execution court where it does not, with a time Saudi, Qatari or Kuwaiti counsel can state from experience.

A pledge over the shares of the asset company answers with the asset state's treatment of share pledges: whether the company's registry records them, whether a foreign lender may own the shares on enforcement given the state's ownership limits, and whether the enforcement is a sale to a qualified buyer or a transfer to the lender. An answer that depends on the lender being permitted to own is an answer that depends on the state's category rules.

A pledge over the shares of an intermediate holding company in a centre answers with the centre's security registry and its court, which have enforced such pledges, with the proviso that possession of the holding company is possession of a company whose asset is in another state, so the route runs on through the chain.

An assignment of receivables answers with the debtor's jurisdiction and its rules on notice and on set-off, and with the practical question of whether the debtor will pay the lender.

A charge over bank accounts answers with the account bank's jurisdiction and its willingness to act on the lender's instruction without the borrower's, which the account bank's own terms decide.

A guarantee answers with the guarantor's assets and jurisdiction, which for an intermediate holding company with no assets but the shares below is the same route again.

Where the answer lives

In the state the collateral sits in, under that state's law, in that state's registry, before that state's court or on its out-of-court route. The Kingdom built a movables registry in 2020 and an out-of-court route with it, so that a secured creditor may proceed against registered movables on a default without a prior judgment, on the regime's conditions; real estate runs through the real estate registry and the execution court. Qatar runs two court systems, the State's and the Centre's, with a forum clause deciding which hears the lender, and perfection in the State's registries for State assets. Kuwait's security over land waits on a mortgage law that has not arrived, and Kuwaiti counsel's answer on the day is the answer. The centres have their own security registries, their own insolvency statutes and their own courts that have enforced charges over centre companies' assets and shares.

The same pledge, over the same kind of share, produces a different answer in each, and the lender's counsel in each state is the person who can give it. A package drafted in one law and perfected in none has a contract.

Why lists grow

Lists grow for the same reason chains do: each adviser adds the item that answers its own concern, and nobody is responsible for the whole. The lender's counsel in the centre adds the pledges it knows how to draft. The lender's counsel in the asset state adds the mortgage it knows how to register. The borrower's counsel adds the guarantees it has seen in other facilities. The lender's credit function asks for "the full package" and receives a list that satisfies the request and answers the question once, at one item, while the other eleven are drafted, negotiated, perfected and maintained at a cost that appears in the borrower's legal bill and the lender's. A list read as a whole, with the one question asked of each item, is shorter by two thirds and stronger by the route it keeps.

The three Gulf states' routes, read closely

The Kingdom's 2020 movables regime created a registry in which a security interest over movables, shares, receivables, accounts, equipment, is recorded, a priority by registration, and an enforcement route on which a secured creditor may proceed against the collateral on a default without a prior judgment, subject to the regime's notice and process conditions. Real estate is outside the regime: a mortgage over Saudi land is recorded at the real estate registry and enforced through the execution court on the execution law's timetable, which Saudi counsel states from experience and which is longer than the movables route. A package with Saudi assets therefore has two routes with two times.

Qatar's security over State assets is perfected in the State's registries under the State's law, whatever law the facility chooses, and enforced in the State's courts or, where the parties and the Centre's jurisdiction permit, in the Centre's court with execution onshore. The forum clause decides which court hears the lender's claim on the facility; the asset's registry and the State's law decide the enforcement over the asset. A charge over a usufruct needs the grantor's consent under the grant. A package with Qatari assets has a forum question and a grantor question before it has a route.

Kuwait's security over land is the question the pending mortgage law leaves open: banks cannot yet lend on residential mortgages, the Kuwait Credit Bank occupies that field, and security over other real estate is read by Kuwaiti counsel against the registry's practice on the day. Security over a licensed scheme's parcel, the holder Decree 195 of 2025 permits, is a newer question still. A package with Kuwaiti assets has Kuwaiti counsel's answer on the day as its route, and a lender that wants more than that answer wants what the law does not yet give.

The centres' routes are the most predictable: a charge over a centre company's assets or shares, registered in the centre's security registry, enforced in the centre's court under the centre's insolvency statute, with a record of cases a lender's counsel can read. The predictability is why the intermediate pledges sit there and why they are control rather than the route: the centre's court delivers the holding company quickly, and the asset beneath it is still in another state.

Where it surfaces

At the credit committee, when the enforcement memorandum shows one route and eleven decorations, and the advance rate follows the route.

At the registry, when the pledge the lender wanted is one the registry does not record.

At enforcement, when the top holding company is taken in a month and the asset is two years of consents away.

At the share pledge over an onshore company, when the lender cannot own the shares and the sale to a qualified buyer is the route nobody timed.

At the intercreditor, when two lenders' items conflict and the first to move takes what its item reaches.

The cost of getting it wrong

A package whose route was assumed costs, at default, the time the route actually takes and the value lost while it runs, which for an operating asset is the asset's management and its customers. It costs the margin the lender charged for an uncertainty the borrower could have removed. It costs the drafting and the perfection of every item that answered nothing. The one question, asked of each item before the term sheet, costs counsel in each state a fortnight.

Weighting the package

The structure is drawn so that the fastest route sits at the layer where the asset's value is. Security at the fund level over a chain of four does not reach the asset until four sets of consents have been obtained, four boards have been replaced and four jurisdictions' processes have run. Security at the asset company, perfected in the asset's state, reaches the asset directly. The package that holds has its weight at the bottom of the chain and its convenience at the top: the asset-level mortgage and pledge as the route, the intermediate pledges as control of the chain while the route runs, and the fund-level security for a different lender's different question. The structure paper names, for each item, the country, the process, the person and the months.

The lender's pricing

A lender prices the advance rate and the margin on the shortest route's time and certainty, and on the value the route reaches. A package whose best answer is six months to possession of the asset itself, on an out-of-court route counsel has used, is priced as secured. One whose best answer is three years through a court that has not enforced such a pledge is priced as nearly unsecured, whatever the list's length. A borrower that understands the pricing offers the lender the short route and drafts the rest of the list as control, and a borrower that offers the long list and no short route pays for the list twice: once in the drafting and once in the margin.

The intercreditor between the items

A package with items held by different lenders, a fund-level lender with the commitments and an asset-level lender with the mortgage, is a package whose items conflict, and the intercreditor settles the ranking: who may enforce which item when, who is paid first from which proceeds, whether the asset-level lender's enforcement releases the fund-level lender's security over the chain above, and what the fund-level lender may do with the holding companies' shares if it takes them. Without it, the answers to the one question are decided by whoever moves first.

By item · by answer	Possession of what	Where enforced	Route	Typical time	Depends on
Mortgage over the asset	The asset	The asset's state	Registry and execution court, or out-of-court where it exists	Months to a year	Perfection; the state's route; the buyer's category
Pledge over the asset company's shares	The company	The asset's state	Registry; sale to a qualified buyer	Months to years	Whether the registry records it; whether a foreign lender may own
Pledge over a centre holding company's shares	The holding company	The centre	The centre's registry and court	Months	The chain beneath; the consents below
Assignment of receivables	The cash flows	The debtor's jurisdiction	Notice; the debtor's payment	Weeks	Set-off; the debtor's co-operation
Charge over accounts	The cash	The account bank's jurisdiction	The bank's instruction	Days	The bank's terms
Guarantee from a holding company	The guarantor's assets	The guarantor's jurisdiction	Claim and enforcement	As the assets permit	Whether the guarantor has assets beyond the shares below

A timeline, as a type

Month one: the term sheet; the borrower's counsel asks the one question of each item on the lender's standard list and returns the list with answers, two thirds of it struck. Month two: counsel in the asset's state confirms the route's practice and time; the lender's counsel confirms rather than discovers. Month three: the facility signed; the mortgage registered at the real estate registry; the movables pledge registered in the 2020 registry; the centre pledge registered in the centre; the intercreditor with the capital-call lender signed the same day. Year two: a refinancing; the package re-read and re-perfected where the new facility requires. Year four: a default; the movables route proceeds in months; the execution court sells the parcel in the year; the lender is paid from the asset; the fund's own lender's package above was released on the enforcement under the intercreditor.

The structure paper's page

The structure paper's security page is the list with the answer beside each item: the thing, the place, the process, the person and the months, with counsel's name in the state for each. Beneath it, the shortest route identified and marked as the route; the other items marked as control; the intercreditor's ranking; and the constitution's limits on what the fund may grant, quoted. The page is what the lender's credit committee reads, and a borrower that hands it over has priced its own facility.

The chain's consents on the route

The route at the asset level still runs through the chain's consents where the enforcement is a sale of the asset company's shares: the asset state's ownership rules on who may buy, the registry's recording of the buyer, and any regulator's approval of the transfer. Those consents are read at the term sheet, because a route that ends in a buyer the state will not register is a route that ends in a sale that cannot complete. The package names the class of buyer the enforcement may sell to, and the lender's counsel confirms that such buyers exist.

The fund's power to grant

Every item on the list is granted by somebody, and the grantor's power is the first thing the lender's counsel reads after the route. The fund's constitution permits borrowing within a cap and security for it, and says whether the fund may guarantee another person's debt, which is a different act; a guarantee given without power is voidable. The holding companies' constitutions permit their boards to grant security within their authority, and a board that approved by circular resolution without meeting has granted security a liquidator can question. The asset company's constitution and the asset state's law permit the mortgage and the pledge, within the ownership rules. An item granted without power answers the one question with nothing, however it is perfected.

Insurance, assignments and the smaller items

The smaller items on a list, the assignment of insurances, the assignment of contracts, the pledge of shareholder loans, the step-in rights under the development agreement, answer the question in their own way: they deliver to the lender not the asset but the things that keep the asset worth having while the route runs. An assignment of insurances delivers the proceeds of a loss. An assignment of the development agreement with a step-in right delivers the programme. A pledge of the shareholder loans delivers the fund's own claim against the asset company, so that the fund does not rank beside the lender. Each is kept as control, drafted to be enforceable in its own jurisdiction, and none is mistaken for the route.

Reading the package with the register

The register reads the security page for what the lender can take from the fund's holders: nothing directly, in a package confined to the asset and the chain, and the undrawn commitments in a capital-call facility. A holder's counsel asks whether any item reaches the holder, whether the fund has guaranteed anything, and whether an enforcement at the asset level would cost the fund its equity and nothing more. A security page that answers those three in a paragraph is a page the holder's counsel clears; one that does not is a page the holder's counsel reads item by item.

The enforcement memorandum

The lender's counsel writes, before the facility is signed, an enforcement memorandum: for each item, the route, the steps, the documents, the consents, the time and the likely outcome, in the state the item lives in, on the law as it stands. The memorandum is the lender's answer to the one question, and it is the document the credit committee prices on. A borrower that has drafted its list with the answers beside each item has written the memorandum's first draft, and the lender's counsel confirms it; one that has not waits for the memorandum, which takes a quarter, and reads in it the items that answered nothing.

A package, as a type

A lender finances a parcel company in the Kingdom beneath a centre platform. The borrower's counsel drafts the list with the question answered beside each item. A mortgage over the parcel at the real estate registry, enforced through the execution court on the timetable Saudi counsel states. A pledge over the parcel company's shares and receivables in the 2020 movables registry, enforced on the out-of-court route, with the enforcement a sale to a buyer registered under the 1446H law. A charge over the parcel company's accounts with a Saudi bank on the bank's terms. A pledge over the shares of the centre portfolio holder in the centre's registry, as control of the chain. No guarantee from the platform, because the platform's constitution does not permit one and the lender did not need it. The lender's counsel reads the answers, confirms them, and prices the facility on the movables route's months. The intercreditor with the platform's capital-call lender ranks the two packages and releases the portfolio holder's pledge on an asset-level enforcement.

Four cases, as types

A lender takes a package of pledges at three centre layers and a guarantee from each, and no security in the asset's state, on the footing that control of the chain is control of the asset. On default the lender takes the top holding company in the centre in a month and spends two years obtaining the asset state's consents to replace the boards below and to sell the asset, during which the asset's management, unpaid, leaves.

A lender takes a pledge over the shares of an onshore asset company in a state whose ownership limits prevent a foreign lender from owning the shares and whose registry records no share pledges. The pledge is a contract between the lender and the borrower, enforceable as damages, and the lender's package is the unsecured claim it was priced as secured.

A lender takes a mortgage over a Saudi parcel at the real estate registry and a pledge over the parcel company's movables in the 2020 registry, with the enforcement routes confirmed by Saudi counsel who has used them. On default the movables route proceeds in months and the parcel is sold through the execution court in the year; the lender is paid from the asset itself.

A borrower's counsel drafts the list with the one question answered beside each item and offers the lender the short route. The lender's counsel confirms it in a fortnight; the facility is priced as secured; the intercreditor is drafted at signing; and the list is two pages shorter than the borrower's last facility's.

What each party holds

The borrower's counsel holds the list with the answer beside each item, drafted before the term sheet.

The lender's counsel holds the confirmation of each answer in the state it lives in, and the enforcement memorandum.

Counsel in each asset state holds the registry's practice and the route's timetable, from experience.

The lender holds the pricing, on the shortest route.

The fund holds the constitution's limits on what it may grant, and the intercreditor's ranking.

The account bank holds its own terms.

The sequence

1. The one question is asked of every item on the proposed list, and the answer written beside it.
2. Items with no answer are removed; items with long answers are kept as control and not as the route.
3. The shortest route to the asset's value is identified and placed at the asset level, in the asset's state, perfected in its registry.
4. Counsel in each state confirms the route's practice and timetable from experience.
5. The package is offered to the lender with the answers, and the lender's counsel confirms rather than discovers.
6. The intercreditor between any two packages is drafted at signing.

Questions a manager asks

Is a longer list safer. It is longer. Safety is the shortest route's time and certainty, and a list that has one good route and ten decorations is as safe as the route.

Can security be taken at the fund level only. It can, for a lender whose question is the commitments; for a lender whose question is the asset, fund-level security reaches the asset through every consent in the chain.

Who answers the question for a Gulf state. Counsel in that state who has enforced through the route, because the answer is practice and time rather than text.

What if the asset state's registry will not record the pledge the lender wants. Then the pledge is a contract, and the package is redesigned around what the registry records: the asset itself, the receivables, the accounts.

Does the out-of-court route in the Kingdom change the package. It shortens the answer for registered movables from years to months, and a package with Saudi movables is built around it.

Why does the lender ask about ownership limits. Because enforcement of a share pledge ends in somebody owning the shares, and if the lender cannot, the route is a sale to a buyer the state permits, which is longer and less certain.

Terms used

The one question: who takes possession of what, through which process, where, and how long it takes.

Route: the process by which an item of security delivers possession.

Perfection: the registration that makes an item bind third parties in the asset's state.

Out-of-court route: an enforcement process that does not require a prior judgment, such as the Kingdom's 2020 movables regime.

Control: security over the chain that holds it still while the route runs, as opposed to the route itself.

Intercreditor: the agreement ranking the items held by different lenders.

What to read

The security regime, the registry rules and the enforcement route of each asset state; the centres' security registries, insolvency statutes and court records; the lender's enforcement memorandum; the constitution's limits on what the fund may grant; the intercreditor. On this site, the security room under Structures, the Kingdom's security room in the onshore interfaces and the worked structure on a security chain.