Real Estate Mezzanine and A/B Loans: Structuring and Enforcing Intercreditor and Co-Lender Agreements

Reconciling the Demands and Objectives of Senior and Junior Lenders

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, September 28, 2017

Recorded event now available

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Program Materials

This CLE webinar will prepare real estate finance counsel to structure intercreditor agreements between senior/mezzanine and A/B lenders. The panel will discuss the most frequently negotiated provisions, and the challenges to enforcing intercreditor agreements in distressed loan scenarios.

Description

Whether analyzing, negotiating or drafting an intercreditor agreement, counsel for lenders and borrowers must understand the key provisions and their potential impact. Counsel must also incorporate the lessons from past defaults, workouts and bankruptcies.

The critical question in most intercreditor agreements relates to each lender’s respective ability to exercise key rights under, and enforce or challenge the agreement when a real estate loan defaults or a dispute between lenders arises. Loan workouts and bankruptcies complicate the enforcement and remedies available.

Lenders involved with tranched loans, including mezzanine loans and A/B structured loans, must be vigilant about protecting their rights and remedies under existing, as well as future, agreements. Borrowers need to understand how these agreements and tiered lending structures affect a borrower’s ability to negotiate a workout, extension or discounted payoff.

Listen as our panel of experienced practitioners outlines key legal issues facing parties to tiered real estate financing transactions involving mezzanine intercreditor agreements and co-lender agreements. The panel will discuss the key terms in the agreements, the implications of real estate workouts and bankruptcies, the concerns of the borrower, and lender strategies for enforcement of remedies.

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Outline

  1. Key provisions of mezzanine loan intercreditor agreements
  2. Key provisions of co-lender agreements, including control rights of B Note holders
  3. Participation agreements as a variation of co-lender agreements
  4. The role of the servicer under co-lender agreements and tensions with B Note holders
  5. Borrower concerns and considerations
  6. Lender strategies for dealing with a defaulted loan
  7. Lessons from workouts and bankruptcies on structure, enforceability and remedies

Benefits

The panel will review these and other key issues:

  • What provisions are typically included in an intercreditor agreement or a co-lender agreement?
  • What are the lessons from recent years that influence how these agreements are drafted?
  • How does the securitization of the senior loan affect the workings of these agreements and the workout of troubled loans?
  • What challenges have senior and junior lenders faced when working out loans on transactions that include a mezzanine loan or B Note?
  • What are the payment priorities under tiered financing structures?

Faculty

Prigoff, Bruce
Bruce E. Prigoff

Partner
Cox Castle & Nicholson

Mr. Prigoff represents real estate capital markets lenders and investors in bridge and mezzanine financing, A/B...  |  Read More

Waters, Michael
Michael J. Waters

Of Counsel
Wachtel Missry

Mr. Waters’ practice involves counseling institutional investors and lenders, real estate opportunity funds, and...  |  Read More

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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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