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A Subordination Agreement changes the priority order of who gets paid first when multiple parties have claims on the same asset. In Singapore's banking sector, these agreements often come into play when a property has multiple mortgages or when companies restructure their debt obligations.

The agreement lets a senior creditor maintain their first-ranking position even when new debt comes in. For example, if you refinance your home loan with a new bank, your existing bank will typically require a Subordination Agreement to ensure their loan stays in first position. Under Singapore's Property Law, these agreements help protect lenders' interests while giving borrowers more flexibility to manage their debts.

Use a Subordination Agreement when you need to change the payment priority between multiple lenders on the same asset. This commonly happens during property refinancing in Singapore, where a new bank needs to take over the first-ranking position from your existing lender. It's also crucial when restructuring business loans or taking on additional financing while keeping existing credit facilities.

The timing matters most when negotiating new loans, refinancing existing debt, or during corporate restructuring. For property transactions under Singapore's Banking Act, lenders often require these agreements before approving new mortgages. Getting this agreement in place early helps avoid delays in loan disbursement and ensures smooth transitions between lenders.

• Deed Of Subordination: Most formal version used in Singapore real estate, executed as a deed for stronger legal enforcement
• Loan Subordination Agreement: Standard form for ranking multiple loans against the same collateral
• Intercompany Subordination Agreement: Specifically for managing debt priority between related companies
• Subordinated Creditors Security Agreement: Combines subordination terms with security arrangements for junior creditors
• Attornment And Non Disturbance Agreement: Used in commercial leases to protect tenant rights while subordinating lease interests

• Banks and Financial Institutions: Primary users of Subordination Agreements, both as senior lenders protecting their first-ranking position and as new lenders requiring priority
• Property Owners: Sign these agreements when refinancing mortgages or taking additional loans against their property
• Corporate Borrowers: Need these when restructuring debt or securing new financing while maintaining existing credit facilities
• Legal Counsel: Draft and review agreements to ensure compliance with Singapore's Banking Act and MAS guidelines
• Business Directors: Execute agreements on behalf of companies when managing multiple credit facilities or intercompany loans

• Identify All Debts: List existing loans, their amounts, and creditors involved, including registration numbers for secured debts
• Gather Documents: Collect loan agreements, security documents, and current priority rankings for all affected debts
• Define New Priority: Clearly outline the new ranking order and payment waterfall structure
• Party Details: Compile full legal names, registration numbers, and authorized signatories of all creditors and debtors
• Template Selection: Use our platform's Singapore-compliant Subordination Agreement template to ensure all mandatory elements are included
• Review Rights: Document any special rights or restrictions for each creditor under the new arrangement

• Party Identification: Full legal names and details of all creditors, debtors, and guarantors involved
• Debt Description: Specific details of all affected loans, security interests, and payment obligations
• Priority Structure: Clear ranking order and payment waterfall arrangements between creditors
• Subordination Terms: Explicit statements on payment restrictions and turnover obligations
• Default Provisions: Consequences and remedies if subordination terms are breached
• Governing Law: Express choice of Singapore law and jurisdiction
• Execution Block: Proper signature sections for all parties, with company stamps where required

A Subordination Agreement differs significantly from an Asset Purchase Agreement in both purpose and application. While both documents deal with assets and financial arrangements, they serve distinct functions in Singapore's legal framework.

• Primary Purpose: Subordination Agreements rearrange payment priorities between existing creditors, while Asset Purchase Agreements facilitate the transfer of asset ownership
• Timing of Use: Subordination Agreements come into play during debt restructuring or new financing, whereas Asset Purchase Agreements are used during business sales or acquisitions
• Parties Involved: Subordination typically involves multiple creditors and a debtor, while Asset Purchase mainly concerns a buyer and seller
• Legal Effect: Subordination changes existing rights without transferring ownership; Asset Purchase transfers both ownership and associated rights
• Duration: Subordination continues until debt is settled; Asset Purchase concludes once transfer is complete