Australia needs LMA-style intercreditor agreement

Author: | Published: 10 Jun 2011

Australia’s leveraged finance market should adopt a standard intercreditor negotiation agreement, similar to Europe’s Loan Market Association (LMA) agreement.

Allen & Overy’s Sydney-based partner, Angela Flannery, thinks Australia’s disparate approach to addressing intercreditor issues created uncertainty over the right level of enforcement rights for mezzanine lenders.

“The argument that mezzanine lenders should have no enforcement rights or very delayed enforcement rights has been gathering pace in Australia’s senior bank lending market since the crisis,” she said. “This is obviously very difficult for mezzanine lenders to accept.”

A more European-style...