Document background
The Collateral Sharing Agreement is essential in complex financing arrangements where multiple creditors hold security interests in the same collateral. This document is particularly relevant in the Nigerian market where syndicated lending and project finance transactions require careful structuring of security arrangements. The agreement ensures compliance with Nigerian security and banking regulations while providing a clear framework for creditor rights, priorities, and enforcement procedures. It addresses key aspects such as voting rights, enforcement mechanisms, proceeds distribution, and the appointment and powers of security trustees. The document becomes crucial when different creditors have varying levels of priority or when sequential financing requires coordination of security interests.
