Commentary

53 Complete subordination

BANKING vol 4(1)
| Commentary

53 Complete subordination

| Commentary

2: CATEGORIES OF SUBORDINATION

53 Complete subordination

Subordinations are divided into two categories — the so called complete subordination and the springing subordination. In the complete subordination, the arrangements relating to subordination come into effect on day one and apply throughout the life of the senior debt. This would occur where, for instance, no payments could be made in respect of the mezzanine debt or the equity investment until the senior debt had been completely repaid. There can, of course, be many variations on this particular theme which would enable the mezzanine lenders or the equity investors to see some

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