Definition for : Back-Up Servicer
In a structured transactions, a "Back-Up Servicer" ("BUS" in abbreviated form, and also called "Substitute Servicer") is a third party which remains on stand-by, ready to be activated if certain performance triggers are breached. For example, in the context of a Securitisation of Trade receivables, the BUS will notify the trade debtors to pay to a segregated bank account any amount due to the company, and will take charge of chasing up late payments. The trigger could be a marked deterioration in the originator's financial Position.
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