Prioritizing Payments: The Role of Waterfall Provisions in Intercreditor Agreements

Check out this practice note discussing the “waterfall” of an intercreditor agreement. A waterfall refers to the order of application of funds or proceeds and is a repayment mechanism by which funds from a loan are paid out in an enforcement scenario. An intercreditor agreement should set out the payment obligations from the proceeds of the borrower’s collateral as between the holders of different levels of first lien debt and second lien debt.

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