Spain

Security interest law in Spain

1. Can an intercompany guarantee be granted?

1.1 Upstream?	Yes, but consider bankruptcy law provisions and financial assistance.
1.2 Downstream?	Yes, but consider bankruptcy law provisions and financial assistance.
1.3 Lateral?	Yes, but consider bankruptcy law provisions and financial assistance.
2. Can a guarantee be given under foreign law (e.g. English law)?	Yes, but be careful with enforcement proceedings.
3. Any special arrangements (e.g. to deal with transfer pricing/corporate benefit)?	Transfer pricing and corporate benefit requirements apply.

4. Can a security interest be granted in the following type of asset?

4.1 Real property	Yes
4.2 Shares (privately held)	Yes
4.3 Shares (marketable securities)	Yes
4.4 Receivables	Yes
4.5 Bank account	Yes
4.6 IP/Trademark	Yes
4.7 Equipment/Plant/Machinery	Yes
4.8 Inventory	Yes
4.9 Insurance	Yes
4.10 Rights under a contract	Yes
5. Can security interests be granted to a foreign lender?	Yes
6. Can multiple security interests be granted over the same asset?	Yes
7. Can a security interest be granted to secure liabilities of a holding company, a subsidiary or any other affiliate?	Yes

8. In order to be enforceable against third parties, must a security interest be?

8.1 Notarised?	Yes, in most cases.
8.2 Registered?	Depends on the type of security.
8.3 Other?	No
9. Does registration in most cases protect the secured creditor against the debtor’s subsequent dealings with the secured asset?	Yes
10. Is there any stamp or similar tax or duty payable on the security document?	Yes, stamp duty.

11. For a security interest to be legally enforceable which items must be filed as part of the registration or notarisation process?

11.1 Entire security agreement?	Yes
11.2 Names of pledgor and pledgee?	Yes
11.3 Description of secured asset in general terms?	Yes
11.4 Description of each individual secured asset?	Yes
11.5 Documents concerning ownership of secured asset?	In some cases.
11.6 Documents concerning debt in respect of which the asset is being secured?	Generally yes, but in some cases a description may be sufficient.

12. Can a right to enforce security arise:

12.1 When the secured debt is unpaid and due?	Yes, but it can also be executed as a consequence of a cross default/default when it is contractually considered as an early termination cause.
12.2 When there is some other breach of the pledge/security agreement?	Please see 12.1 above
12.3 When the debtor becomes insolvent?	No, however it is common to contractually envisage imminent insolvency of the debtor that triggers the enforcement of securities.
13. Can the creditor enforce its security interest by taking possession of the asset and selling it without court assistance?	No, except for banks (and some other institutions) for pledges over negotiable securities and certain credit rights.
14. Is an instrument for direct enforcement necessary/available/market practice?	Yes
15. Are powers of attorney to the secured party used to facilitate a sale of secured assets in an enforcement situation?	Yes
16. If a sale is permitted without court assistance does it have to be made by public auction?	Yes, in general, but a direct sale may be agreed but always according to market price.
17. Can a transfer of all or part of the debt be made without affecting the security over the assets?	Yes
18. Is there anything else of which a lender should be aware as unusual or particularly difficult?	N/A