The Super Senior HY documents follow the successful introduction of Super Senior documents, which were introduced in November 2013, which adopt a super senior rotation facility and senior sequester note structure. This project was launched in response to the demand of members of the leveraged finance market, who are increasingly seeing that funds are being made available to businesses through a combination of loans and high-yield bonds. While it was recognized that the nature of these transactions and the various players involved in the process would make it more difficult to produce “One Size fits all” documents, members felt that the basic formulation of a standard form model would be a step towards greater efficiency and standardization across the market, providing a common framework and language for stakeholders. The LMA believes that this will allow market participants to focus on the main business drivers and structural nuances that form the basis of their transactions. Earlier this year, we wrote about how the LMA had updated its suite of super senior loans and inter-creditor documentation. The LMA has now gone further and recently advanced a new form of recommended intercreditor agreement for the use of external capital transactions, the financing of which includes a super senior filming facility and a “senior term” mechanism under an agreement (the “Super Senior ICA”). The Super Senior/Senior ICA is based on the LMA forms of the Inter-Creditor Agreement for Loan-Financed Transactions: It is interesting to note, however, that the European form of eintameite differs from that of the United States, where there would often be a separate “lender-to-lender agreement” in which credit participants would agree on priorities between them, are set out in a document of which the borrower is not a member. The recommended form was drawn up assuming that the facility would not be used, that an underlying agreement would be reached between lenders (as may be the case in non-European countries) and that lenders would be among them with respect to the right to pay under the long-term facility, but the revolving facility would be before the end of the recovery mechanism by increasing operating fund commitments at the forefront of implementation after implementation. At that time, the revised screen rate replacement clause as a stand-alone driver was created in the slot-in format. In addition, a user manual has been published and should be read in conjunction with the clause.

Both documents are available to LMA users on the LMA website and the LMA has confirmed that the amendments will be introduced in due course in the precedents of the Facility Agreement. It is understandable that this new funding structure has led to a great focus on the position of intercreator. No financial service provider ever wants to be in the cold of a borrower`s insolvency. The Inter-creditor agreement is therefore always negotiated vehemently with each financing transaction. The power plant is control. Who has a seat at the restructuring table? Who is best placed to determine what is best for the group of creditors? Who has the ability to control the decision on enforcement action and the most appropriate way to implement it? At the beginning of these “Super Senior” transactions, there was no regulated position in the market, so there was a lot to be gained. In Europe, all intercreditator provisions are generally defined in a single ICA involving the borrower and all lenders. The most common structure for these types of transactions is when one of the largest funds participates in the long-term loan on a pari passu basis and a bank provides “Super Senior” working capital facilities.