When Do You Need An Intercreditor Agreement

You will find most of the following documents associated with an intercreditor agreement for a mezzanine loan. Such an agreement also includes the regulation of redemption rights. This right allows a lender to purchase the claims and privileges of other lenders. Such an option is triggered after certain events, for example. B after the filing of insolvency proceedings. As with the agreement between creditors on senior versus subordinated debt, the payment of a return on equity is subject to certain payment terms. These are generally stricter than those that apply to subordinated eligible payments and include the following: Bankruptcy Subordination: This is another important provision that is intended to transfer the claims of the subordinated creditor to the claims of the senior creditor in the event that the group of borrowers is settled.