This Practice Note provides an introduction to intercreditor agreements and their key provisions. This Practice Note:

1. •

   explains the purpose of having an intercreditor agreement and when an intercreditor agreement would be used instead of a deed of priority or subordination deed

2. •

   provides links to helpful information on how to draft and negotiate an intercreditor agreement

3. •

   sets out the key parties to an intercreditor agreement

4. •

   provides an explanation of the key provisions found in an intercreditor agreement, including:

   1. ◦

      ranking and subordination

   2. ◦

      restrictions on payments to junior creditors

   3. ◦

      amendments to transaction documents

   4. ◦

      restrictions on taking enforcement action

   5. ◦

      control of security enforcement strategy, and

   6. ◦

      release of claims on disposals

Different types of transactions have different typical structures and types of debt and there are also significant variations within each type of transaction. This Practice Note discusses provisions that are commonly seen in most intercreditor agreements.