💼 Intercreditor deed

An Intercreditor Agreement (Unsecured Debt) under UK law is a legal document that outlines the rights and obligations of multiple lenders who have provided unsecured loans to the same borrower. In this agreement, lenders agree to coordinate and prioritize their claims in the event of default or insolvency of the borrower.

The purpose of this agreement is to establish a fair and structured framework for managing the intercreditor relationship, ensuring that each lender's interests are protected and that there is a clear understanding of the repayment hierarchy. It addresses key aspects such as the priority of debt repayment, enforcement actions, and decision-making processes among the lenders.

By entering into this agreement, lenders have a mechanism to resolve potential conflicts and avoid costly disputes. It sets out the order in which lenders will be repaid and the limitations on taking legal actions against the borrower. Additionally, it may outline conditions for the release of security or the subordination of debt in favor of senior lenders.

The Intercreditor Agreement is particularly relevant in cases where a borrower has multiple sources of unsecured financing, such as syndicated loans or bond issuances. The agreement defines how the lenders will interact and cooperate with each other, ensuring a coherent and orderly approach to the repayment process. It also typically addresses scenarios such as amendments to loan terms, waivers, and provisions for the transfer of debt.

As UK law governs this template, it will incorporate legal principles and regulations specific to the jurisdiction. This agreement could be used by lenders, borrowers, or legal professionals involved in complex financing arrangements to establish a well-structured and protected lending relationship.

An Intercreditor Agreement (Secured Debt) under UK law is a legal template specifically designed to outline the rights and responsibilities between different lenders who have provided secured debt to a borrower. In a secured lending arrangement, the borrower pledges collateral (such as property, assets, or shares) as security for the loan. This agreement establishes the hierarchy of creditors' claims in case of borrower default or insolvency.

This legally binding contract addresses the relationship and coordination between senior and junior secured lenders. It governs the enforcement of security rights, allocation of recovery proceeds, and outlines the steps to be taken in various scenarios, including loan default, bankruptcy, or restructuring. The document typically covers important aspects like restrictions on additional borrowing by the borrower, subordination of junior debt to senior debt, procedures for the release or substitution of collateral, and mechanisms for communication and decision-making among all lenders.

An Intercreditor Agreement aims to protect the rights and interests of both senior and junior lenders involved in a secured debt transaction while providing a coherent framework for preserving the value of the collateral and maximizing recovery in case of borrower default. This template is commonly used in various commercial contexts, such as project finance, real estate financing, leveraged buyouts, or corporate debt restructuring, where multiple lenders are involved and want clarity on their respective rights and priorities.