As a general rule, each party should be informed of the critical elements of the agreement for each act signed by two or more parties. It is therefore necessary for a junior lender to reach a clear ground before the start of the transaction and identify fundamental issues: such an agreement plays a decisive role in the right to pledge. Therefore, the agreement is important to all lenders, as it is the basis of rights and priorities if the borrower is not able to pay properly or be insolvent. However, in some cases, there are more than two lenders. Or even more than two high-level lenders. In this case, the leading lenders sign a separate agreement defining each other`s authorities. Typically, a primary lender dictates the duration of the agreement. Therefore, if the junior lender does not negotiate properly, this may be at a disadvantage. The junior lender should consider meeting the contractual terms for the project in the event of a delay in payment from the borrower. In the event of such a situation, the junior lender should be aware that there are usually only two options: either to inject funds into the project, to remedy financial defaults under the senior lender, or to pay the priority lender. This last point is often almost impossible in cases where the priority lender has provided very large financing.

A senior debt credit agreement consists of sensitive issues, such as interest charges, costs and allowances, which favour the priority lender over junior lenders. It is also common for a primary lender to be able to modify them without the consent of a junior lender. Therefore, a junior lender should negotiate a cap on the amount of priority debt and ensure that there is a clause preventing the priority lender from changing the terms of the priority loan. In some cases, the borrower is also a party to the agreement. The borrower recognizes the terms of the agreement, as is the failure to pay the junior lender until the borrower pays the debt in full to the principal lender. An intercreditor agreement (or inter-creditor agreement) is a contract between two other creditors. Such an agreement comes into effect when the borrower has two (or more) lenders. Lenders sign a contract between them specifying all the necessary points. The contract contains details such as dispute settlement, different deposit positions, creditors` responsibilities, each creditor`s debts, impact on other creditors, etc. To overcome these problems, it is important that the junior lender carefully evaluates the act before accepting it. In addition, the junior lender must negotiate the agreement fairly.

If the efforts have not been profitable, the junior lender cannot accept the agreement and look for other options. Junior lenders should be careful when evaluating an intercredit file before participating. One way to achieve this goal is to negotiate a fair edge and develop achievable plans.