Examining the LMAs recent changes to real estate finance and intercreditor agreements

Examining the LMAs recent changes to real estate finance and intercreditor agreements

The Loan Market Association (LMA) has updated its real estate finance (REF) facility agreements and intercreditor agreements. Amelia Slocombe, legal director of LMA, outlines the main changes in the agreements.

Original news

LMA REF facility and intercreditor agreements updated

To account for changes made to its leveraged documentation in November 2016, the LMA has updated its real estate finance facility agreements and intercreditor agreements.

Which of the LMA real estate finance documents have been updated and why?

We have updated the:

  • single currency term facility agreement for REF multi-property investment transactions
  • single currency term facility agreement for REF development transactions (with the above, the LMA REF facility agreements)
  • LMA intercreditor agreement for REF transactions (structural subordination)
  • LMA intercreditor agreement for REF transactions (contractual subordination only)

What key changes have been made to the LMA REF documents?

The main changes relate to inclusion of the following in the LMA REF facility agreements:

  • an option providing for free transferability by lenders to pre-approved entities (otherwise known as a ‘white list’)
  • various general updates in response to market developments, including the:
    • reflection of international financial reporting standards requirements in the presentation of accounts
    • expansion of the borrower’s obligation to provide documentation for ‘know your customer’ purposes on a change of status/shareholders to such changes affecting non-obligor holding

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About the author:

Meet Suzanna:

1. Banking and finance lawyer with experience in real estate finance, trade finance and aviation finance

2. Likes skiing, comedy shows and listening to live music

3. Thinks the law is not for the fainthearted

Suzanna has wide-ranging experience in banking and finance transactions with particular emphasis on advising lenders in the context of real estate finance and trade finance, and advising on ECA supported aviation finance transactions. Suzanna qualified as a solicitor in 2001 with Theodore Goddard (now Addleshaw Goddard LLP) and has since gained experience with Barclays Bank PLC, ECGD and Crédit Agricole CIB before joining LexisNexis.