What happens to a floating charge when certain events occur?

When certain specified events occur, a floating charge typically converts into a fixed charge. This conversion happens when the conditions that allow the charge to float no longer exist. For instance, if the charged assets become specific or if the company enters into liquidation or administration, the floating charge crystallizes into a fixed charge on the assets it covers.

A fixed charge provides the creditor with a higher level of security, as it gives them direct control over specific assets, rather than a general pool of assets as seen with a floating charge. This change enhances the creditor's rights in case of default, allowing them to enforce their security against specific assets rather than having to chase assets that are subject to a broader floating charge.

The other options indicate changes that do not reflect the legal framework surrounding floating charges, as a floating charge does not simply become unsecured, eliminated, or change into an ordinary charge in the context of company law and insolvency.