What Are Intercreditor Agreements

In the case of cross-border transactions or transactions involving the execution of collateral in different countries, exchange rates and fluctuations should be addressed in the intercreditor agreement. Additional credit facilities such as refinancing or increasing loan extensions (e.B accordion facilities), as well as seed loans and self-government loans (PIDs) in the context of bankruptcy may also be subject to the overall cap. Similarly, interest and various fees, costs, offsets and other expenses may be subject to a different cap or placed in the same basket. in the context of real estate financing, entities that receive rent) and the mezzanine lender lends to an indirect holding company of these companies. The senior lender (as a debt holder in the business units) ranks ahead of the mezzanine borrower (as the equity holder in the operating units), and therefore the mezzanine lender is “structurally” subordinated, depending on where it lends to the borrowing group versus the senior lender. Junior lenders should exercise caution when evaluating a creditor security before enrolling. One way to achieve this goal is to negotiate a fair advantage and create workable plans. However, if efforts to establish such conditions are in vain, the junior lender is advised to waive the agreement or look for other options. The parties must agree on the changes that require consent and whether the requirement to obtain consent should ever be rescinded (p.B. Should the lead lender need the mezzanine lender`s consent when the mezzanine debt is completely under water?). Another basic principle of creditor agreements is that the lead creditor generally has the right to control the maintenance and sale of joint security, while the imitation creditor must waive certain statutory rights that would otherwise allow the imitating creditor to challenge the enforcement and enforcement proceedings. As a general rule, a “standstill period” is imposed, which imposes on the principal creditor the exclusive right to enforce and pursue remedies against the debtor for a certain period of time […].


Comments are closed.