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documents that evidence the existence and enforceability of the secured credit, as wellas a report regarding the beneficiary’s efforts to collect payment to that date.3. Pledge3.1. Common Pledge (Prenda ordinaria)3.1.1. CharacteristicsThrough the formation of a pledge contract, the lender is permitted to secure the loanwith one or more goods, regarding which it has a right of preference superior to otherlenders of the same debtor. The pledge is an interest in specific property (right in rem)over a moveable and alienable good used to secure compliance with an obligation andpreference in the payment thereof.The pledge is, therefore, an ancillary contract whose only purpose is to secure for thelender the performance of an obligation owed to the lender and preference in the paymentthereof. Traditionally, through the pledge, the debtor or third-party guarantor forfeitspossession of the goods given in guarantee; however (as the next section willshow), it is possible to avoid this in the case of a non-possessory pledge (prenda sintransmisión de posesión), in which the debtor remains in possession of the goods and hasthem at his disposal.3.1.2. Material object of the commercial pledgeAny alienable moveable good can be the material object of a pledge, including machinery,equipment, negotiable instruments, stocks, bonds, securities, title to merchandise,etc., all of which can be the property of the debtor or a third party, who must have titleto or adequate authority to dispose of such goods.193Financing Guarantees3.1.3. Requirements for the formation of a commercial pledgeThe manner of perfecting the pledge varies depending on the goods that are to serve ascollateral. For example:a) Goods or negotiable instruments payable to bearer:i) By tendering these goods or instruments;ii) By depositing them with a third party designated by both parties and placingthem at the disposal of the lender;iii) By depositing them at the disposal of the lender in locations to which the latterhas the key, even if the facility may be the property of the debtor;b) Negotiable instruments payable to the order of a specified person, with endorsementto the lender and, if applicable, the endorsement and the correspondingnotation in the issuer’s records;