Intercreditor agreement meaning

Links to useful intercreditor materials This table sets out the principal checks a junior lender should make when assessing a simple intercreditor agreement between senior secured lenders, junior secured lenders and unsecured subordinated creditors. It is designed for readers with limited familiarity with intercreditor arrangements. The table highlights the core, commonly encountered points in a straightforward secured bilateral corporate loan and does not attempt to capture every potential negotiation issue, nor matters arising in specialist or more complex deals such as those in the leverage finance market. What is reasonable will vary with the nature of the transaction, the identity of the lender and the parties’ relative bargaining power. For specialist intercreditor topics, see the materials referenced below... Introductory materials Practice Note: Introductory guide to Intercreditor Agreements, covering typical provisions found in intercreditor agreements. Practice Note: How to draft and negotiate intercreditor arrangements in loan transactions, offering introductory guidance on drafting and negotiation. Precedent: Intercreditor deed-single company, a precedent suitable for a straightforward...

This Checklist This Checklist outlines key considerations for lawyers (external or in-house) acting for the lender(s) when responding to a borrower led amendment request. It concentrates on permanent amendments rather than one off waiver or consent requests. For guidance on those, see Practice Note: Waivers and consents. In a syndicated transaction, the borrower will ordinarily deliver a written amendment request to the facility agent, which typically includes: the rationale for seeking the amendment, the specific clauses impacted, the applicable consent thresholds, and any snooze and lose provisions. The Loan Market Association (LMA) has published a helpful guide to the amendment process on a syndicated transaction. On a bilateral deal, a borrower’s amendment request to the lender may take a less formal form. This Checklist also references provisions in the Loan Market Association investment grade multicurrency term and revolving facilities agreement incorporating backward-looking compounded rates and forward-looking term rates (the LMA Investment Grade Facility Agreement) and Precedent: Facility...

In this issue: Property (Digital Assets etc) Act 2025 Lending Aviation finance Shipping finance Real estate property Sustainable finance Derivatives Regulation for derivatives Regulation for banking lawyers New and updated content Useful information Property (Digital Assets etc) Act 2025 Property (Digital Assets etc) Act 2025 comes into force The Act clarifies which things can be recognised as objects of personal property rights, ensuring they are not excluded from such treatment. It took effect on 2 December 2025. Source: Property (Digital Assets etc) Act 2025. Lending LMA publishes note clarifying deed requirements and intercreditor documentation The Loan Market Association (LMA) has assessed the impact of obiter observations in Macdonald Hotels v Bank of Scotland [2025] EWHC 32 (Comm), which raised doubt over whether a particular testimonium clause—akin to those in the LMA’s recommended intercreditor agreements—sufficiently demonstrates, on the face of the document, an intention for it to take effect as...

Banking & Finance—October 2025 case round-up AerCap Ireland Ltd v AIG Europe SA and others [2025] EWHC 2529 (Comm) Aviation finance—recovery of losses under insurance policies—sanctions This ruling follows the June 2025 decision in AerCap Ireland Ltd v AIG Europe SA [2025] EWHC 1430 (Comm), where Mr Justice Andrew Butcher found for AerCap, the world’s largest aircraft lessor, and other lessors, confirming that jets and engines left in Russia after the 2022 invasion were definitively lost. The present judgment records Mr Justice Butcher’s orders on costs and sets out his reasoning on the award of interest and on whether permission to appeal should be granted. Songa Product and Chemical Tankers III AS v Kairos Shipping II LLC [2025] EWCA Civ 1227 Shipping finance—interpretation of Clause 29 of (BIMCO) Barecon 2001 standard bareboat charter form The Court of Appeal dismissed the owner’s challenge concerning the proper construction of Clause 29 of the BIMCO Barecon 2001 bareboat charter. The court held that, although bareboat charters grant...

Banking & Finance 2024 case round up Force majeure—shipping contract—reasonable endeavours RTI Ltd (Respondent) v MUR Shipping BV (Appellant) [2024] UKSC 18 This Supreme Court decision examines how a force majeure clause in a shipping contract between MUR Shipping BV (MUR) and RTI Ltd (RTI) should be interpreted. Such clauses excuse a party from performing when specified events outside the parties’ reasonable control (acts of God) occur. They frequently contain a ‘reasonable endeavours’ proviso, which prevents a party from invoking force majeure if the consequences could be averted by taking reasonable steps. The appeal turned on whether those reasonable endeavours required the party seeking to rely on force majeure to accept an offer of performance that did not match the contract terms. In this instance, the suggested alternative was payment in euros rather than US dollars. The Supreme Court unanimously allowed the appeal, ruling that MUR’s refusal to accept RTI’s non-contractual proposal did not amount to a failure to exercise reasonable endeavours...

Loan market and developments Overview Broadly, Scotland’s loan market mirrors that of England. Financial services regulation operates on a UK‑wide basis; a substantial body of legislation governing companies and other corporate vehicles (including corporate insolvency) likewise applies across the UK; and all Scottish clearing banks conduct business in every UK jurisdiction, as do their counterparts across the UK. In practical terms, this means English law governed loan documents typically require minimal amendment for UK cross‑border lending transactions. There are, however, some differences in terminology and certain statutory variations that must be allowed for; beyond those matters, an English law loan document and a Scots law loan document are closely aligned. It is commonplace, for example, for English law loan agreements to be deployed in Scottish lending transactions. The principal divergences between the jurisdictions arise in relation to property law and to the law concerning rights in security, where Scots law and English law are notably distinct. Lending Is it necessary to secure any consents or licences to...

Loan market and developments Please provide a succinct outline of the current condition of the loan markets in your jurisdiction and any noteworthy recent developments. The US corporate loan market remains a significant pillar of the US economy. While the US loan market has undergone considerable change in recent years, it is still resilient and continues to be one of the most inventive and consequential areas within the US capital markets. Two principal components of the US corporate loan space are broadly syndicated loans (BSL) and private credit transactions. The BSL segment is a key funding source for medium- and large-sized companies, comprising loans where multiple banks and non-bank financial institutions extend finance through a syndicate of lenders. Private credit typically involves lending by non-bank lenders on a bilateral basis or by a small cadre of lenders (often termed ‘club deals’). Both segments have seen strong growth and transformation over the past several years. Broadly Syndicated Loans Although private credit often captures more media focus, syndicated lending...

ARCHIVED: This Practice Note is archived and is no longer maintained Coronavirus (COVID-19) Lawyers across the globe have been addressing shared concerns linked to the coronavirus (COVID-19) outbreak. Several issues are especially pertinent for banking and finance practitioners. For additional detail and commentary, see Practice Note: Coronavirus (COVID-19) implications for Banking & Finance lawyers, which is updated frequently with news, practical guidance and analysis on the impact of COVID-19 developments. This Practice Note sets out governmental and regulatory actions taken in response to the pandemic from a lending standpoint, the effects on facility agreements—viewed from both borrower and lender perspectives—and a series of practical considerations relating to executing transactions. We have compiled COVID-19 FAQs, bringing together common questions that may arise on lending deals during the crisis. We add to this list on a regular basis. To access the questions, see Practice Note: Coronavirus (COVID-19)—Banking & Finance frequently asked questions [Archived]. Specialist financing transactions This Practice Note summarises core, general points to assess on...

This Deed is made on [ insert day and month ] 20[ insert year ] Parties [ Insert name of Chargor ], being a company incorporated in England and Wales, with registered number [ insert company number ], and whose registered office is at [ insert address ] (the “ Chargor ”); and 1 [ Insert name of Security Agent ], acting as security agent and trustee for the Finance Parties pursuant to the terms and conditions set out in the [ Facilities Agreement OR Intercreditor Agreement OR Security Trust Deed ] (the “ Security Agent ”). Recitals: (A) The Finance Parties have consented to provide loan facilities subject to the terms and conditions set out in the Facilities Agreement (as defined below). (B) As a condition precedent to the loan facilities becoming available, the Chargor must execute this Deed for the purpose of granting security in favour of the Security Agent in relation to the Secured Obligations (as defined below)...

£[ insert number ] [ insert rate ]% convertible [ subordinated ] redeemable loan notes 20[ insert year ] [ insert name of issuer ] This Instrument bears the date [ insert day and month ] 20[ insert year ]. Parties [ Insert name of issuing company ], incorporated in England and Wales under number [ insert company number ], whose registered office is at [ insert address ] (Issuer) background The Issuer has determined to establish up to a maximum nominal amount of £[ insert number ] [ insert rate ]% convertible [ subordinated ] redeemable loan notes, which shall be constituted in accordance with the provisions set out in this document...

This Agreement is dated [ insert day and month ] 20[ insert year ] Parties The Consenting Lenders (as set out in Schedule 1); [ The Consenting Bondholders (as set out in Schedule 2); ] [ insert name of debtor company ], a company registered in [ insert country eg England and Wales ] with company number [ insert registered number ], whose registered office is at [ insert address ]; [ The Material Companies (as set out in Schedule 3); ] Recitals On [ insert date ], the directors of the Company announced a proposal to restructure the claims of certain creditors of the [ Company OR Group ] following a period of financial distress. On [ insert date ], the Company and certain creditors entered into a Standstill Agreement in connection with the proposed restructuring. [ On [ insert date ], the Company and certain creditors agreed non-binding heads of terms for the...