Date: 07 Ott 2021 0 Comment Posted by: mariodanieledicamillo
Standstill period: There should be no standstill period in an inter-credit agreement on priority debt against equity, as the institutional investor should never be allowed to accelerate its debt or impose guarantees before the priority and revolving debt is repaid in full. The institutional investor should be treated as the equity provider that he really is and should not win and have a right of acceleration simply because he has invested through a debt instrument. Priority of charges: Where the overnight creditor benefits from an indulgent debt guarantee, it should consider including in the security agreement a provision stating that the priority creditor`s guarantee has priority. Transfer restrictions: the priority creditor and the overnight creditor must be able to assign or transfer their rights and obligations under the interconnection agreement to any assignee or buyer of the priority or reducible debt. As for priority debts vs. The same provisions should apply to the institutional investor, but only if a buyer or assignee first accepts the intercreditive agreement as an institutional investor/subordinate creditor. The junior lender should consider including in the agreement terms for resuming the project in the event of a delay by the borrower. If such a situation occurs, the junior lender should know that there are usually only two options: either inject finance into the project to cure the loss of money under the senior Lender, or pay the senior Lender. This last point is often almost impossible when the priority lender has provided very large sums of financing. An interconnection agreement between a priority creditor and a subordinated creditor should contain the following provisions and address the following key issues: However, younger creditors may not wish their acceleration and enforcement rights to be limited to this serious circumstance. It is therefore common for an inter-creditor agreement between a senior creditor and a younger or mezzanine creditor to include a “status quo” provision. An intercredit agreement, commonly referred to as an inter-creditor instrument, is a document signed between two or more creditors of the bankstop in the United StatesIn February 2014, there were 6,799 FDIC-insured commercial banks in the United States. .