Document background
The Intercompany Subordination Agreement is essential in complex corporate structures operating under Philippine jurisdiction where multiple levels of debt exist within a corporate group. This document is typically used when a company or group of companies has both senior external debt (such as bank loans or bonds) and intercompany loans or other subordinated debt. It establishes clear priorities between different classes of debt, ensures orderly payment structures, and protects senior creditors' interests. The agreement becomes particularly crucial in scenarios of corporate restructuring, refinancing, or when implementing new group financing arrangements. It must comply with Philippine corporate law, banking regulations, and insolvency legislation, while providing practical mechanisms for debt subordination and payment restrictions.
