A comparison of the LMA REF Intercreditor Agreements against the LMA Leveraged Intercreditor Agreement
A comparison of the LMA REF Intercreditor Agreements against the LMA Leveraged Intercreditor Agreement

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • A comparison of the LMA REF Intercreditor Agreements against the LMA Leveraged Intercreditor Agreement
  • The LMA leveraged and REF intercreditor agreements
  • Intercreditor comparison table

This Practice Note compares key terms of the Loan Market Association (LMA) intercreditor agreement for leveraged acquisition finance transactions (senior/mezzanine) (the LMA Leveraged Intercreditor Agreement), the LMA intercreditor agreement for real estate finance transactions (senior/mezzanine) where the mezzanine debt has been structurally subordinated (the LMA REF Intercreditor Agreement—Structural Subordination) and the LMA intercreditor agreement for real estate finance transactions (senior mezzanine) where the mezzanine debt is not structurally subordinated but subject to contractual subordination in the intercreditor agreement only (the LMA REF Intercreditor Agreement—Contractual Subordination only) (together the Intercreditor Agreements).

For more information in relation to the principles of subordination and the key provisions of intercreditor agreements in general, see Practice Notes: Subordination and Intercreditor agreement—key provisions.

The LMA leveraged and REF intercreditor agreements

The LMA Leveraged Intercreditor Agreement

The LMA Leveraged Intercreditor Agreement was the first of the LMA intercreditor agreements to be published and is suitable for adaptation to different kinds of transactions. Prior to the LMA REF Intercreditor Agreement being published it was often adapted for use in real estate finance transactions. Note that the LMA has published two additional intercreditor agreements for use on transactions involving high yield bonds and a further intercreditor agreement for use on transactions involving a super senior revolving facility and senior term facility structure.LMA website

The LMA REF Intercreditor Agreements

In June 2014, the LMA published the LMA REF Intercreditor Agreement—Structural Subordination for use in real estate finance transactions. This was published in response to demand from the real estate finance market who were increasingly seeing loans provided with a combination of senior and mezzanine debt.