Document background
The Intercreditor Agreement is essential in complex financing arrangements where multiple creditors provide different types of debt to a borrower or group of borrowers in Indonesia. This document becomes necessary when structuring transactions involving senior debt, mezzanine financing, and/or subordinated debt, particularly in project finance, acquisition finance, or corporate lending scenarios. The agreement must comply with Indonesian law requirements, including specific provisions of the Indonesian Civil Code, Banking Law, and Investment Law. It typically includes detailed provisions on creditor ranking, payment waterfall, security sharing, enforcement rights, and voting mechanisms. The document is crucial for establishing clear procedures for decision-making among creditors and managing potential conflicts in default scenarios, while ensuring enforceability under Indonesian law and regulatory framework.
