Senior loans, mezzanine loans, intercreditor and subordination arrangements in real estate finance

This guidance note discusses the most typical arrangements and points for negotiation between senior lenders and mezzanine lenders in a real estate finance transaction in relation to key provisions of a typical intercreditor agreement.

These key provisions relate to:

• • subordination and priority of payments;
• • which lender may take enforcement action;
• • the mezzanine lender’s right to cure a default under the senior loan;
• • the mezzanine lender’s right to purchase the senior loan; and
• • consent rights of the mezzanine lender.

See Senior loans, mezzanine loans, intercreditor and subordination arrangements in real estate finance.

For more information about intercreditor arrangements generally, see Priority/subordination agreements.