Intercreditor Agreement for Malta

Intercreditor Agreement Template for Malta

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Intercreditor Agreement

"I need an Intercreditor Agreement for a real estate development project in Malta, involving a senior bank lender, mezzanine debt provider, and shareholder loans, with the senior facility agreement dated January 15, 2025, where the senior debt is €50 million."

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What is a Intercreditor Agreement?

The Intercreditor Agreement is a crucial document in complex financing structures where multiple creditors provide different types of debt to the same borrower or borrower group. It becomes particularly important in the Maltese context where financings often involve both local and international lenders, requiring compliance with both Maltese law and international financing practices. The agreement typically comes into play in scenarios involving senior debt, mezzanine financing, shareholder loans, or bond issuances, where establishing clear priorities and enforcement rights is essential. It addresses key aspects such as payment hierarchies, security sharing, enforcement standstills, and voting rights among creditors. The document must comply with Maltese financial services legislation, the Civil Code, and other relevant local laws while meeting international structured finance standards.

What sections should be included in a Intercreditor Agreement?

1. Parties: Identifies all parties to the agreement including different classes of creditors, debtors, and security trustee/agent

2. Background: Sets out the context of the financing arrangements and purpose of the intercreditor agreement

3. Definitions and Interpretation: Defines key terms and establishes interpretation principles

4. Ranking and Priority: Establishes the ranking of debt and security between different creditor classes

5. Payment Provisions: Details the payment waterfall and rules governing payments between creditors

6. Turnover of Receipts: Provisions requiring creditors to turn over payments received in breach of the agreement

7. Security and Guarantees: Provisions relating to shared security and guarantees, including enforcement restrictions

8. Enforcement: Rules governing when and how security can be enforced, including standstill provisions

9. Application of Proceeds: Details how proceeds from enforcement or insolvency will be distributed

10. Changes to the Parties: Provisions governing transfers and assignments by creditors

11. Costs and Expenses: Allocation of costs and expenses among parties

12. Notices: Communication requirements and methods between parties

13. Miscellaneous: Standard boilerplate provisions

14. Governing Law and Jurisdiction: Specifies Maltese law as governing law and jurisdiction for disputes

What sections are optional to include in a Intercreditor Agreement?

1. Security Trustee/Agent Provisions: Required when a security trustee or agent is appointed to hold and enforce security on behalf of creditors

2. Subordination Provisions: Detailed subordination mechanics needed when there is structural or contractual subordination

3. Purchase Option: Provisions allowing junior creditors to purchase senior debt under specific circumstances

4. Hedge Counterparty Provisions: Required when hedge counterparties are parties to the agreement

5. Borrower Group Provisions: Additional provisions governing borrower group conduct when borrower entities are parties to the agreement

6. ICA Amendment Provisions: Special provisions governing amendments to different aspects of the agreement, needed in complex multi-creditor scenarios

7. Creditor Committee Provisions: Required when establishing a formal creditor committee structure

8. Debt Trading Provisions: Detailed provisions for debt trading and transfer restrictions, needed in syndicated scenarios

What schedules should be included in a Intercreditor Agreement?

1. Form of Accession Deed: Standard form for new parties to accede to the agreement

2. Form of Resignation Letter: Standard form for parties to resign from their roles

3. Security Documents: List of security documents subject to the intercreditor arrangements

4. Notice Details: Contact details for all parties

5. Form of ICA Amendment Letter: Standard form for documenting amendments to the agreement

6. Creditor Classification: Detailed breakdown of creditor classes and their respective debt holdings

7. Payment Waterfall: Detailed waterfall provisions for different scenarios (enforcement, non-enforcement, exit)

8. Security Trust Provisions: Detailed provisions regarding the security trust arrangement if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Acceleration Event
Acquired Indebtedness
Additional Creditor
Additional Debtor
Affiliate
Agent
Agreed Security Principles
Appropriation
Authorized Representative
Available Enforcement Proceeds
Blocked Account
Business Day
Cash Proceeds
Change of Control
Common Assurance
Common Security
Consent
Credit Document
Credit Facility
Creditor Liabilities
Debt Document
Debtor
Default
Delegate
Distress Event
Enforcement Action
Enforcement Date
Enforcement Notice
Event of Default
Exposure
Facility Agreement
Final Discharge Date
Finance Document
Finance Party
Financial Indebtedness
Group
Guarantee
Guarantee Liabilities
Hedge Counterparty
Hedge Documents
Hedging Liabilities
Holdings
Insolvency Event
Insolvency Proceedings
Instructing Group
Intercreditor Amendment
Interest
Junior Agent
Junior Creditor
Junior Debt
Junior Documents
Junior Payment Default
Liabilities
Liability
Majority Creditors
Majority Senior Creditors
Material Adverse Effect
Mezzanine Creditor
Mezzanine Debt
Non-Cash Consideration
Notice
Parent
Party
Payment
Payment Block Event
Permitted Payment
Primary Creditors
Principal
Prior Ranking Security
Proceeds
Qualifying Senior Creditor
Receiver
Recoveries
Relevant Liabilities
Security
Security Agent
Security Documents
Security Property
Senior Agent
Senior Creditor
Senior Debt
Senior Documents
Senior Event of Default
Senior Facilities Agreement
Senior Lender
Senior Payment Default
Shareholder Creditor
Shareholder Documents
Shareholder Liabilities
Standstill Period
Subordinated Creditor
Subordinated Debt
Subsidiary
Tax
Transaction Security
Transfer
Trust Property
Trustee Acts
Voting Stock
Clauses
Relevant Industries

Banking & Financial Services

Real Estate & Construction

Infrastructure

Energy & Utilities

Manufacturing

Telecommunications

Healthcare

Hospitality & Tourism

Maritime & Shipping

Technology

Private Equity

Investment Management

Insurance

Professional Services

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Finance

Investment

Debt Capital Markets

Syndications

Transaction Management

Portfolio Management

Restructuring

Risk Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Debt Finance Manager

Investment Director

Credit Risk Manager

Restructuring Officer

Transaction Manager

Security Trustee

Facility Agent

Compliance Officer

Financial Controller

Investment Banker

Private Equity Manager

Portfolio Manager

Syndications Manager

Industries
Civil Code of Malta (Chapter 16 of the Laws of Malta): Provides the fundamental legal framework for contracts, obligations, and security interests in Malta, including provisions on ranking of creditors and general principles of contract law
Companies Act (Chapter 386 of the Laws of Malta): Regulates corporate entities and includes provisions relevant to corporate borrowing, security creation, and registration requirements for charges created by companies
Banking Act (Chapter 371 of the Laws of Malta): Regulates banking operations and credit institutions in Malta, including provisions affecting lending activities and security arrangements
Financial Institutions Act (Chapter 376 of the Laws of Malta): Governs financial institutions other than banks and includes provisions relevant to lending activities and financial services
Code of Organization and Civil Procedure (Chapter 12 of the Laws of Malta): Contains provisions on enforcement of security interests and creditor remedies in case of default
Set-Off and Netting on Insolvency Act (Chapter 459 of the Laws of Malta): Regulates set-off rights and netting arrangements in insolvency scenarios, crucial for intercreditor relationships
Financial Collateral Arrangements Act (Chapter 426 of the Laws of Malta): Implements EU Directive on financial collateral arrangements and provides framework for financial collateral between institutions
Recovery and Resolution Regulations (S.L. 330.09): Implements EU Bank Recovery and Resolution Directive (BRRD) affecting creditor rights in case of bank resolution
Continuation of Companies Regulations (S.L. 386.13): Provides rules on company reconstructions and amalgamations which may affect intercreditor arrangements
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