December 10, 2020...1:16 pm

Intercreditor Agreement For Real Estate Finance Transactions

Some traditional concepts of leveraged finance have not found their place in the LMA agreement on debt-financed financing to the ICA, such as the option for debtors to acquire debts, the abandonment of payments to mezzanine creditors through a “mezzanine-stop termination scheme”, clearing of recoveries between priority lenders and hedgeor counterparties (now covered under the senior facility agreement) and facilitating the refinancing of priority debts. The aim of the ICA is to increase efficiency by standardising the conditions and provisions of the building plates and to reflect current market practices, as in the draft guidelines for inter-discoverment agreements in European commercial real estate transactions, published in November 2012 by the European Council on Commercial Finance (Europe). From the legal perspective, the importance of having a clear understanding of structural issues before the development begins cannot be overemphasized, as well as a clearly agreed list of priority and mezzanine financial documents, as well as an understanding of the party responsible for the development of the relevant documents. In addition to the corporate and security structure, the following points are important for the principles of inter-decree (this list is not exhaustive): the starting point of the preparation of the ICA was the LMA`s recommended form of the credit agreement for debt-financed operations (senior/mezzanine) and was established on the basis of a corporate structure, loan and guarantee, security and security. However, there are differences in approach between this loan-financed inter-creditor agreement and the ICA that it should be aware of. As the world`s largest law firm by number of lawyers, we are able to leverage an unprecedented range of expertise from law firm practices, real estate, borrowing, business, taxes, construction, restructuring and funds. In this way, we can put in place customized teams for your transactions to ensure that all aspects are endowed with the highest competence. As the real estate finance market continues to recover strongly, we are seeing more and more mezzanine loans in real estate financing. This triple holdco structure is now the norm for large notes and transactions in the upper middle classes, but it remains to be seen whether, in a competitive market, the structure will be requested by priority lenders and mezzanine in the middle market and, as noted above, by priority lenders and mezzanine in the middle market, and, as noted above, when it is an inappropriate structure for the intermediate and below market.