The CMBS Form of Intercreditor Agreement: Time for a Fresh Look?
The CMBS Form of Intercreditor Agreement: Time for a Fresh Look?
The CMBS Form of Intercreditor Agreement: Time for a Fresh Look?
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<strong>The</strong> <strong>CMBS</strong> <strong>Form</strong> <strong>of</strong> <strong>Intercreditor</strong> <strong>Agreement</strong>:<br />
<strong>Time</strong> <strong>for</strong> a <strong>Fresh</strong> <strong>Look</strong>?<br />
• <strong>CMBS</strong> <strong>Form</strong> introduces uncertainty as to what party would deliver the<br />
replacement guaranty (―such transferee or an Affiliate there<strong>of</strong><br />
reasonably satisfactory to the Senior Lender…‖)<br />
• SPE that is Mezzanine Lender or transferee upon <strong>for</strong>eclosure may<br />
find support in the <strong>CMBS</strong> <strong>Form</strong> <strong>for</strong> the position that Senior Lender<br />
must accept replacement guaranty from it. However, such a<br />
replacement guaranty would not add any true credit support.<br />
• Consider—bright line tests or approval rights with respect to the<br />
creditworthiness/identity <strong>of</strong> the party that must deliver the<br />
replacement guaranty.<br />
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