Senior/mezzanine creditor intercreditor issues—enforcement
Produced in partnership with Hogan Lovells

The following Banking & Finance practice note produced in partnership with Hogan Lovells provides comprehensive and up to date legal information covering:

  • Senior/mezzanine creditor intercreditor issues—enforcement
  • Controls on mezzanine lenders taking enforcement action
  • Enforcement notice
  • Standstill period
  • Mezzanine option to purchase
  • Control of enforcement strategy
  • The Security Agent’s ability to release mezzanine claims
  • Mezzanine release—senior position
  • Mezzanine release—mezzanine position
  • Provision of financial information
  • More...

Senior/mezzanine creditor intercreditor issues—enforcement

Enforcement is an important area regulated by the intercreditor agreement. This note discusses:

  1. the situations in which mezzanine lenders typically can and cannot take enforcement action

  2. issues around any mezzanine option to purchase provision, and

  3. the situations in which each class of creditor typically has control over enforcement strategy

The note also highlights commonly negotiated issues in each area.

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.

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 payment controls and document amendments can be found in Practice Note: Senior/mezzanine creditor intercreditor issues—document amendments and payment controls.

Practice Note: Intercreditor rights comparison table—junior debt instruments provides a table setting out commonly negotiated positions for junior lenders on a leveraged finance transaction in the upper end of the market.

Practice Note: Acquisition finance—introductory guide provides an introductory guide to acquisition finance while the Glossary of acquisition finance terms and jargon explains some commonly used terms.

Controls on mezzanine lenders taking enforcement action

Under the terms of the mezzanine facility agreement, the mezzanine lenders will be entitled to take enforcement action following an event of default. For

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