A Primer On Intercreditor Agreements

Law360, New York (March 11, 2014, 6:36 PM EDT) -- When structuring a complex debt financing, financiers need to consider whether unsecured and structurally subordinated “mezzanine” debt ought to be replaced in the capital hierarchy with secured second-lien credit. The relatively lower financing cost for second-lien credit is based on the assumption that the second-lien lenders might obtain some equity value from the liens on the residual collateral, which would not otherwise be available with such “mezzanine” debt.

Requests for second-lien status also arise when these lenders have their own credit facility and need such liens...
To view the full article, register now.