i. The nature of the security of the indebtedness under insolvency law involves a legal arrangement whereby a creditor has a claim to specific assets of the borrower to secure repayment of the loan. In this case, Kokote Bank Plc has a legal interest in the house at No 2, Coconut Avenue, Enugu, which serves as collateral. Under insolvency law, secured creditors like Kokote Bank Plc will have priority over unsecured creditors in case of the borrower’s insolvency, as they hold a security interest in the debtor’s property.

ii. The facts provided suggest that the security arrangement is a mortgage rather than a pledge. This is because the property (the house at No 2, Coconut Avenue) has been transferred to the lender (Kokote Bank Plc) as collateral, subject to cessation on redemption. In the case of a mortgage, the borrower retains possession of the property while the lender holds an interest in it until the loan is repaid. Specifically, this appears to be a legal mortgage as the house has been transferred through a deed, and the borrower’s ability to manage the property is restricted.