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An Intercreditor Agreement manages the rights and priorities between multiple lenders who provide financing to the same borrower. In the Philippines, these agreements are especially common in project financing and syndicated loans, where several banks or financial institutions share the lending risk.

The agreement spells out crucial details like payment priorities, security sharing, and enforcement rights when default occurs. Filipino banks often use these agreements to coordinate their actions, particularly when dealing with large infrastructure projects or real estate developments covered by the Financial Rehabilitation and Insolvency Act (FRIA). This helps prevent conflicts between lenders and provides clear rules for handling loan recoveries.

Consider implementing an Intercreditor Agreement when multiple lenders are financing the same project or borrower in the Philippines. This becomes essential in large-scale developments, like infrastructure projects under the Build-Build-Build program, where several banks share lending risks and need clear guidelines for their relationships.

The agreement proves particularly valuable during loan restructuring, debt workouts, or when a borrower faces financial distress. Philippine banks need this framework before extending syndicated loans or participating in project finance deals exceeding ₱1 billion, especially when dealing with assets covered by the FRIA. It helps prevent costly disputes and ensures orderly recovery proceedings.

• First Lien/Second Lien: Common in Philippine real estate financing, establishing clear payment priorities between primary and secondary lenders
• Senior/Subordinate: Used in corporate financing, determining how different classes of debt rank in payment order
• Pari Passu: Popular among equal-ranking creditors in syndicated loans, ensuring all lenders receive proportional treatment
• Bilateral: Used between two major creditors, often seen in joint venture projects under the PPP framework
• Multi-tiered: Complex agreements for large infrastructure projects involving multiple lender types, including government financial institutions

• Commercial Banks: Primary users who draft and enforce Intercreditor Agreements, especially major Philippine banks involved in syndicated lending
• Legal Counsel: Both in-house and external lawyers who structure and review these agreements to ensure compliance with Filipino banking regulations
• Corporate Borrowers: Companies receiving multiple loans who must understand and comply with the agreement's terms
• Investment Banks: Often coordinate with commercial lenders in complex financing deals
• Government Financial Institutions: Participate when involved in public-private partnership projects or development financing

• Loan Details: Gather complete information about all existing and proposed loans, including amounts, terms, and security arrangements
• Lender Information: Document each participating bank's role, exposure, and specific requirements under Philippine banking regulations
• Security Rankings: Establish clear priority rankings for each lender's claims and collateral rights
• Default Procedures: Define specific actions and remedies when borrowers default, aligned with FRIA guidelines
• Payment Mechanics: Specify how payments will be distributed among lenders, including waterfall provisions
• Documentation Review: Use our platform to generate a complete, legally-sound agreement that includes all required elements

• Identification Section: Full legal names and details of all participating lenders and the borrower under Philippine law
• Priority Rights: Clear hierarchy of creditor claims, payment order, and security interests
• Enforcement Provisions: Specific procedures for exercising rights during default, aligned with FRIA requirements
• Standstill Clauses: Terms restricting individual creditor actions without group consent
• Payment Waterfall: Detailed distribution mechanism for loan payments and recoveries
• Amendment Process: Rules for modifying agreement terms with proper consent levels
• Governing Law: Explicit statement choosing Philippine law as governing jurisdiction

An Intercreditor Agreement differs significantly from a Bond Issuance Agreement, though both deal with debt financing in the Philippines. While Intercreditor Agreements manage relationships between multiple lenders, Bond Issuance Agreements focus on the terms between a single issuer and bondholders.

• Parties Involved: Intercreditor Agreements operate between multiple banks or financial institutions, while Bond Issuance Agreements primarily involve one issuer and multiple bondholders
• Purpose: Intercreditor Agreements establish lender hierarchies and coordination rules, whereas Bond Issuance Agreements set terms for debt security issuance
• Enforcement Mechanism: Intercreditor Agreements detail collective enforcement rights among lenders, while Bond Issuance Agreements focus on bondholder protections and payment obligations
• Regulatory Framework: Bond Issuance Agreements must comply with SEC regulations, while Intercreditor Agreements primarily follow banking laws and FRIA guidelines