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A pledge is one of the four types of security recognised under English law—the types of security are described in Practice Note: Types of security.

For a general introductory guide to security, see Practice Note: Introductory guide to security in a lending transaction.

This Practice Note explains:

1. •

   what a pledge is

2. •

   the type of interest created by a pledge

3. •

   the type of assets which can be pledged

4. •

   how to perfect a pledge

5. •

   priority issues in relation to pledges, and

6. •

   how to enforce a pledge

For ease of reference, in this Practice Note:

1. •

   the 'pledgor' refers to the party providing the pledge (which may in practice be the borrower or a third party security provider)

2. •

   the 'pledgee' refers to the party to which the pledge is granted (which, in practice, is likely to be the lender or possibly a security agent), and

3. •

   the 'secured obligations' refers to the obligations expressed to be secured by the pledge (eg the obligations of a borrower to a lender under a facility agreement)

For