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Asset classes used as collateral for security

Real estate

Can security be granted over real estate? If so, what are the most common forms of security granted over real estate and what is the procedure?

Yes, security can be granted over real estate. The security is registered with the Norwegian Land Register on its official deed template. 

Machinery and equipment

Can security be granted over machinery and equipment? If so, what are the most common forms of security granted over this kind of property and what is the procedure?

Yes, floating charges can be registered in the Norwegian Movable Property Register on both machinery and plant (ie, operating assets) and inventory. Such security interest is created by way of floating charges on the standard template deed of the Norwegian Movable Property Register. Further, it is possible to register security over particular assets registered in other real registers which are organised by the specific items (eg, vehicles, aircraft and vessels). 

Receivables

Can security be granted over receivables? If so, what are the most common forms of security granted over this kind of property and what is the procedure?

Yes, security can be granted over receivables by two means:

  • A floating security interest can be granted over trade receivables by way of registering a floating charge in the Norwegian Movable Property Register.
  • A specific assignment of monetary claims may be obtained by way of notifying the relevant debtor of the claim that a specific assignment has been agreed over such monetary claim.

For both types of security, there is a requirement that the underlying receivable can be assigned or sold to a third party (which is the statutory position under Norwegian law, unless specifically agreed otherwise).

Financial instruments and cash

Can security be granted over financial instruments? If so, what are the most common forms of security granted over this kind of property and what is the procedure?

Yes, security can be created over all forms of financial instrument (eg, shares and bonds). The procedure may vary, although Norway has implemented the EU Financial Collateral Directive (2002/47/EC), which provides an effective mechanism for enforcement of financial security.

Can security be granted over cash deposits? If so, what are the most common forms of security granted over this kind of property and what is the procedure?

Yes, security over cash deposits is possible and common by way of charging a bank account. Unlike in some jurisdictions, it is not necessary to block the account in order to have a perfected security, meaning that the cash subject to security may be either a blocked cash depot or a floating charge over a bank account and all cash deposited into the account from time to time, freely available to the chargor until the security holder decides to block the cash following an event of default. 

Intellectual property

Can security be granted over intellectual property? If so, what are the most common forms of security granted over this kind of property and what is the procedure?

Yes, intellectual property is generally considered part of the operating assets of a business and is charged as part of the floating charge for operating assets. A separate security interest can be granted over patents and patent applications which have been registered in the Norwegian Patent Register.

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