Senior Lender Definition

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Private equity MBO—list of key documents—checklist

Private equity MBO—list of key documents—checklist The key documents for a private equity-backed management or leveraged buyout transaction can be separated into three broad categories: • Acquisition documents—these govern the terms of the acquisition between the seller and the purchaser (ie newco) • Equity documents—these govern the terms of the equity investment and the relationship between the investor/s and management, and • Finance documents—these govern the provision of the debt facilities and any related facilities (such as a revolving credit facility for working capital) Acquisition documents Heads of terms (acquisition) Heads of terms set out, in a short document, a broad outline of the parties' expectations, understanding and agreement of the key terms of the proposed acquisition.Heads will be signed at the beginning of the transaction as soon as the parties agree key terms and before the investor incurs costs in conducting its due diligence and negotiating the transaction documents. Practice Note: Heads of terms—share and asset purchases Precedents: Heads of terms—private M&A—share purchase and Heads of terms—private M&A—asset...

Intercreditor negotiation checklist—junior lenders

Intercreditor negotiation checklist—junior lenders The table below provides an overview of key points that a junior lender should check for when reviewing a straightforward intercreditor agreement involving senior secured lenders, junior secured lenders and unsecured subordinated creditors. It is aimed at users with limited experience of intercreditor agreements. The table focuses on the most important and common issues on a straightforward secured bilateral corporate loan transaction and does not aim to cover every possible negotiating point, nor does it cover points on specialist or more complicated transactions such as those in the leverage finance market. What is acceptable will be influenced by the type of transaction, the particular lender involved, as well as the relative negotiating strength of the parties. For information on intercreditor issues in specialist transactions, see Links to useful intercreditor materials below. Links to useful intercreditor materials Introductory materials For an introductory note on intercreditor agreements, including information on common provisions in intercreditor agreements, see Practice Note: Introductory guide to Intercreditor Agreements. Practice Note: How to draft...

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Senior loans, mezzanine loans and intercreditor arrangements in real estate finance

Intercreditor agreements are complicated and detailed arrangements between two or more sets of creditors, requiring careful consideration both in terms of the level of rights and protections each class of creditor gets and to ensure the arrangements work economically in the context of the respective loan arrangements. For information on intercreditor arrangements in a general context, see Practice Notes:•Intercreditor agreement—key provisions•Intercreditor payment priorities and requisite majorities, and•Senior, mezzanine and junior debtIntercreditor agreements are frequently seen in real estate finance transactions because many lenders are only prepared to lend on a senior basis up to a specified loan to value (which varies from deal to deal according to the nature of the underlying real estate, the ultimate risk profile of the transaction and prevailing market conditions). Often, for a variety of reasons, borrowers require a higher leverage. Mezzanine lenders can assist to fill this funding gap.While each transaction is subject to commercial negotiation, the mezzanine lender will seek to obtain as broad a set of cure and other protective rights, while...

Senior/mezzanine creditor intercreditor issues—document amendments and payment controls [Archived]

ARCHIVED: This Practice Note was archived and is not maintained.This Practice Note discusses two types of provisions that are frequently included in intercreditor agreements that involve both senior and mezzanine lenders:•controls on the ability of senior and mezzanine lenders to amend financing terms without consent from the other creditor class, and•senior creditor controls over payments to mezzanine lenders from the borrower groupThe note gives an overview of the provisions and highlights commonly negotiated areas.For an explanation of the different provisions found in intercreditor agreements, see Practice Note: Intercreditor agreement—key provisions and for an introduction to senior/ mezzanine intercreditor agreements in particular, see Practice Note: Senior/mezzanine creditor intercreditor issues—introduction [Archived].For a straightforward intercreditor agreement with accompanying drafting notes, see Precedent: Intercreditor deed—single company borrower—single secured senior lender—single secured junior lender—single unsecured subordinated lender.More detailed information on enforcement issues can be found in Practice Note: Senior/mezzanine creditor intercreditor issues—enforcement [Archived].Practice Note: Intercreditor rights comparison table—junior debt instruments provides a table setting out commonly negotiated positions for junior lenders on a leveraged finance...

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Deed of priority: single company borrower—single senior secured lender—single junior secured lender

Deed of priority: single company borrower—single senior secured lender—single junior secured lender This Deed is made [insert day and month] 20[insert year] Parties 1 [insert name of Senior Lender] of [insert address] (the Senior Lender); 2 [insert name of Junior Lender] of [insert address] (the Junior Lender); and 3 [insert name of Borrower], a company incorporated in England and Wales with registered number [insert company number] whose registered office is at [insert address] (the Borrower). Background (A) The Senior Lender has [agreed to provide OR provided] the Borrower with a loan facility on the terms of the Senior Facility Agreement (as defined below). (B) The Junior Lender has [agreed to provide OR provided] the Borrower with a loan facility on the terms of the Junior Facility Agreement (as defined below). (C) [It is a condition precedent to the provision of [each of] the Senior Facility(as defined below) [and the Junior Facility (as defined below)] that the parties enter into this...

Subordination deed—single company borrower—single unsecured senior lender—single unsecured junior lender

Subordination deed—single company borrower—single unsecured senior lender—single unsecured junior lender This Deed is made [insert day and month] 20[insert year] Parties 1 [insert name of party] of [insert address] (the Senior Lender); 2 [Insert name of party] of [insert address] (the Junior Lender); 3 [insert name of party], a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at [insert registered office] (the Borrower). Recitals: (A) The Senior Lender has agreed to provide the Borrower with a loan facility on the terms of the Senior Facility Agreement (as defined below). (B) It is a condition precedent to the utilisation of the Senior Facility (as defined below) that the Junior Lender and the Borrower enter into this Deed with the Senior Lender. (C) [[insert further details if required]] The parties agree: 1 Definitions and interpretation 1.1 [Unless defined otherwise in this Deed, or the context requires otherwise, all words or expressions defined in the Senior Facility Agreement have the same...

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In the context of intra-group loans, is a subordination deed only required to subordinate loans from non-obligor lenders to obligor debtors? Is there any reason obligor to obligor intra-group loans require subordination?

In the context of intra-group loans, is a subordination deed only required to subordinate loans from non-obligor lenders to obligor debtors? Is there any reason obligor to obligor intra-group loans require subordination? The facilities agreement will often contain undertakings from the obligors that may provide sufficient protection against a potential competing debt claim from an obligor—this needs to be considered on a case by case basis. The guarantee wording in the loan market association standard form leveraged facilities agreement, for example, prevents an obligor from claiming or proving as a creditor in competition to a finance party. The document also obliges a creditor obligor to grant security over its rights as a creditor in favour of the finance parties. Therefore, it is not invariably be the case that a subordination deed is used in the context of loans between obligors. Non-obligor group creditors will not, however, typically be giving such undertakings in the facilities agreement and should therefore sign up to an intercreditor or subordination deed unless...

How will guarantees granted by a guarantor in favour of two different creditors rank in priority? Will either take priority over the other or will they rank equally?

How will guarantees granted by a guarantor in favour of two different creditors rank in priority? Will either take priority over the other or will they rank equally? The principle at law is that all creditors will rank equally (or pari passu) unless the parties have agreed otherwise. Practice Note: Order of payments explains the pari passu principle in corporate insolvency and notes that: 'If they are ranked 'pari passu', each creditor is paid equally and without preference to one another'. Further general information on the pari passu principle can be found in our PSL Restructuring & Insolvency Practice Note: The pari passu principle and collection remedies for the office-holder. As there is a lender (Lender A) who is the first-ranking lender, Lender B is likely to be asked to agree, along with the guarantors, that Lender B’s guarantee will rank behind Lender A, and that Lender B cannot make a claim under the guarantee without Lender A’s consent or Lender A has released their charge....

GLOSSARY

What does Senior Lender mean?

View the related checklists about Senior Lender

Private equity MBO—list of key documents—checklist

Intercreditor negotiation checklist—junior lenders

View the related practice notes about Senior Lender

Senior loans, mezzanine loans and intercreditor arrangements in real estate finance

Senior/mezzanine creditor intercreditor issues—document amendments and payment controls [Archived]

View the related precedents about Senior Lender

Deed of priority: single company borrower—single senior secured lender—single junior secured lender

Subordination deed—single company borrower—single unsecured senior lender—single unsecured junior lender

View the related q&as about Senior Lender

In the context of intra-group loans, is a subordination deed only required to subordinate loans from non-obligor lenders to obligor debtors? Is there any reason obligor to obligor intra-group loans require subordination?

How will guarantees granted by a guarantor in favour of two different creditors rank in priority? Will either take priority over the other or will they rank equally?

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GLOSSARY

Senior Lender definition

What does Senior Lender mean?

View the related checklists about Senior Lender

Private equity MBO—list of key documents—checklist

Intercreditor negotiation checklist—junior lenders

View the related practice notes about Senior Lender

Senior loans, mezzanine loans and intercreditor arrangements in real estate finance

Senior/mezzanine creditor intercreditor issues—document amendments and payment controls [Archived]

View the related precedents about Senior Lender

Deed of priority: single company borrower—single senior secured lender—single junior secured lender

Subordination deed—single company borrower—single unsecured senior lender—single unsecured junior lender

View the related q&as about Senior Lender

In the context of intra-group loans, is a subordination deed only required to subordinate loans from non-obligor lenders to obligor debtors? Is there any reason obligor to obligor intra-group loans require subordination?

How will guarantees granted by a guarantor in favour of two different creditors rank in priority? Will either take priority over the other or will they rank equally?

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