Shearman & Sterling LLP
Issue link: https://digital.shearman.com/i/1494420
Lien Subordination – Conducting a Super-Priority Uptier Exchange (the credit agreement scenario)* ** In the bond scenario, the question will come down to whether payment and lien priority is explicitly included in the sacred rights (rare in Europe). Additionally, if there is already a permission for super senior debt, usually plugging in additional super senior debt is merely a majority noteholder matter. Can lenders' liens be subordinated with majority lender consent? (Amendment section of credit agreements; sacred rights do not explicitly include lien subordination amendments) Can the borrower conduct open market purchases of the term loans? (Assignment section of credit agreements) Serta transactions prohibited Serta transactions likely permitted Serta transactions prohibited No No Yes Yes No No Yes Yes Are there explicit restrictions on open market purchases with multiple lenders or a cash consideration requirement? (Assignment section of credit agreements) Can the pro rata sharing provisions be amended with majority lender consent? (Amendment section; is the pro rata sharing subject referenced in the amendment section) 39 Liability Management and Refinancing Solutions in Europe