Document background
The Loan Subordination Agreement Template is a crucial document in UAE financial transactions where multiple creditors are involved in lending to the same borrower. This template is designed to comply with UAE Federal Laws and regulations, including the Civil Code (Federal Law No. 5 of 1985) and Commercial Code (Federal Law No. 18 of 1993). It is typically used in scenarios where there is a need to establish a clear hierarchy of debt repayment, such as in project financing, corporate restructuring, or complex lending arrangements. The agreement details the subordination mechanics, intercreditor relationships, payment restrictions, and enforcement rights, while considering both conventional and Islamic finance principles common in UAE transactions. The template can be customized for various business sectors and can incorporate specific provisions for DIFC jurisdiction if required.
