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An Intercreditor Agreement sets out the rules and rights between multiple lenders who have provided loans to the same borrower. In South Africa's complex lending landscape, these agreements help prevent conflicts when different banks or financial institutions have claims on the same assets.

The agreement spells out key priorities: which lender gets paid first if the borrower defaults, how collateral is shared, and who can take enforcement action. It's particularly important in South African business rescue proceedings under the Companies Act, where it helps creditors coordinate their approach and protects their respective interests during debt restructuring.

Use an Intercreditor Agreement when multiple lenders are financing the same borrower, especially in complex South African corporate lending structures. This becomes crucial during syndicated loans, project finance deals, or when a company takes on both senior and subordinated debt from different institutions.

The timing is critical - put this agreement in place before finalizing the loans. It's particularly vital in cases involving secured lending under the Security by Means of Movable Property Act, or when dealing with business rescue proceedings. Getting this right early prevents costly disputes about payment priorities and enforcement rights later.

• Senior-Subordinated Agreements: Common in corporate finance, these establish payment rankings between primary and secondary lenders
• Pari Passu Agreements: Used when multiple lenders share equal rights and priority in claiming assets
• Project Finance Agreements: Tailored for large infrastructure projects with multiple funding sources under South African PPP regulations
• Syndicated Loan Agreements: Coordinate multiple banks lending to a single borrower, often in mining or renewable energy sectors
• Business Rescue Variations: Modified to address creditor priorities during business rescue proceedings under the Companies Act

• Primary Lenders: Usually major South African banks or financial institutions who hold senior debt and initiate the agreement
• Secondary Lenders: Subordinated debt holders, mezzanine financiers, or alternative lending institutions who agree to lower payment priority
• Corporate Borrowers: Companies receiving multiple loans, often in sectors like mining, real estate, or infrastructure
• Legal Counsel: Specialist banking lawyers who draft and negotiate the agreement terms
• Security Trustees: Entities appointed to hold and manage security on behalf of multiple lenders

• Loan Details: Gather all existing loan agreements, including amounts, interest rates, and security arrangements
• Lender Information: Document each lender's priority ranking, security interests, and enforcement rights
• Security Assets: List all collateral and how it's shared among lenders under South African security laws
• Payment Waterfall: Define the exact order of payments and distribution of proceeds
• Enforcement Mechanisms: Specify standstill periods and voting rights for enforcement actions
• Document Generation: Use our platform to create a compliant agreement that includes all required elements

• Parties and Definitions: Clear identification of all lenders, borrowers, and key terms used throughout
• Priority Rankings: Detailed hierarchy of debt and payment rights aligned with South African security laws
• Security Sharing: Specific arrangements for sharing collateral and enforcement proceeds
• Standstill Provisions: Timing and conditions for enforcement actions by different creditor classes
• Payment Mechanics: Precise waterfall provisions for distributing payments and recoveries
• Business Rescue Provisions: Procedures aligned with Companies Act requirements during restructuring
• Amendment Rules: Clear processes for modifying agreement terms with proper consent levels

The Intercreditor Agreement is often confused with a Bond Issuance Agreement, but they serve distinct purposes in South African finance law. While both deal with debt arrangements, their scope and application differ significantly.

• Primary Purpose: Intercreditor Agreements manage relationships between multiple lenders, while Bond Issuance Agreement governs the terms of issuing new debt securities to investors
• Parties Involved: Intercreditor Agreements operate between different classes of lenders, whereas Bond Issuance Agreements primarily involve the issuer and bondholders
• Legal Framework: Intercreditor Agreements focus on creditor priorities and enforcement rights, while Bond Issuance Agreements deal with securities law compliance and investor protection
• Timing of Use: Intercreditor Agreements come into play when multiple loans exist simultaneously; Bond Issuance Agreements are needed at the initial debt raising stage