Cross-border financing: Critical considerations when converting security agreements

By Christofer Fattey and Danijel Augustinovic ( October 23, 2025, 2:34 PM EDT) -- Canadian lenders engaged in cross-border financing frequently require their borrower’s U.S. affiliates to grant security interests in their assets. The standard practice involves using U.S.-law-governed security agreements for these U.S. entities. However, sometimes Canadian lenders or their Canadian counsel will request that a Canadian General Security Agreement (GSA) be “converted” to a U.S. security agreement. While the desire for contractual uniformity across all cross-border obligors is understandable, relying on a poorly converted GSA can lead to serious, negative outcomes and often overlooked legal risks....