Jurisdiction(s):
United Kingdom

Key definition

Intercreditor agreement definition

What does Intercreditor agreement mean? An intercreditor agreement sets out how multiple creditors share rights and priorities in relation to a borrower’s debt and security package. It is a descriptive finance term, not defined by statute, used across secured lending, leveraged finance and note/loan structures. Key features typically include: ranking of debt and security interests (senior, super‑senior, unitranche tranches, mezzanine, hedging and intercompany); payment waterfall and turnover/subordination mechanics; enforcement controls and standstill periods; voting and amendment thresholds; release of security and guarantees; information sharing; and the role and protections of the security agent/trustee. It is essential where a revolving credit facility sits alongside term debt,...

Intercreditor agreements in restructurings: priorities, standstills, enforcement, payment waterfalls, security trustee and Instructing Group dynamics, senior/mezzanine preferences, auctions and fairness opinions, and key LMA provisions

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

Intercreditor agreements for R&I lawyers Rationale

As companies and groups of companies make greater and frequent use of multiple layers of debt, the significance of intercreditor agreements has increased markedly. The purpose of an intercreditor agreement is to manage the likely clashes that will inevitably arise between different classes of secured lenders when a restructuring takes place. These Agreements carry particular weight in Europe, where there is a wide range of potential restructuring procedures, in contrast to the US, where the chapter 11 regime automatically delivers Creditor releases and is relatively well settled and predictable for creditors (see US chapter 11—overview). As a result, an increasing reliance is being placed on the contractual position and its terms...

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Web page updated on 21/05/2026

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