Intercreditor Agreements and Mezzanine Lenders

107 Pages·2013·1.2 MB·English

by  Erika Simon

Presenting a live 90-minute webinar with interactive Q&A

Intercreditor Agreements and Mezzanine Lenders
Structuring Key Provisions to Protect Against and Minimize Lienholder Disputes

THURSDAY, MARCH 14, 2013
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
Today’s faculty features:
Michael D. Schiffer, Partner, Venable, Baltimore
Mark B. Joachim, Partner, Arent Fox, Washington, D.C.
Mark N. Berman, Partner, Nixon Peabody, Boston
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Intercreditor Agreements in Mezzanine Loan Transactions
March 14, 2013

Michael D. Schiffer
Partner
410.244.7546
[email protected]
© 2008 Venable LLP
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Experience
I represent lenders and borrowers in subordinated loan

transactions (and related equity investments) and private
companies in M&A transactions and venture capital
investments. I also advise publicly and privately held REITs
and other corporations in connection with major transactions,
corporate governance issues, securities transactions and
other financings.
Co-chair of Venable's Junior Capital / Mezzanine Finance

Practice Group.

BA0/303022
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Key Topics
Types of Junior Debt

Mezzanine v. Second Lien

Lien v. Payment Subordination

Key Definitions

Payment Subordination

Enforcement Actions

Amendments to Loan Documents

Bankruptcy Issues


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Types of Junior Debt
Numerous types and variations, including

Mezzanine, Second Lien, Separate Collateral,
Last Out and Unitranche
Distinctions among these types tend to blur

Today’s focus

– Intercreditor agreement issues in Mezzanine transactions | Mike
Schiffer
– Intercreditor agreement issues in second lien transactions |
Mark Joachim, Arent Fox
– Bankruptcy issues | Mark Berman, Nixon Peabody

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Mezzanine v. Second Lien | General
Mezzanine

– Fixed interest rate (13% to 18%)
– Equity component typically included
– Very limited rights with respect to collateral enforcement or no
security interest
– Lien and payment subordination
Second Lien

– Variable interest rate (LIBOR plus)
– No equity component
– Second lien on all assets of borrower
– Lien subordination only; no payment subordination

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Lien v. Payment Subordination
Lien Subordination

– Shared collateral
– Senior Lender has exclusive first right to collect proceeds from
shared collateral
Payment Subordination

– Senior Lender has absolute right to payment in full prior to
Mezzanine Lender regardless of source of funds for the
payment

BA0/303022
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