A Letter of Subordination of Debts is a crucial document in corporate finance and debt structuring, particularly in the Indian legal context. It is commonly used when a company has multiple creditors and needs to establish a clear hierarchy of debt repayment, typically as part of new financing arrangements or debt restructuring. The document ensures that junior or subordinated creditors cannot receive payments or enforce their rights until senior debt obligations are satisfied, providing security and comfort to senior lenders. Governed by Indian law, including the Indian Contract Act, 1872, Companies Act, 2013, and relevant banking regulations, this document includes detailed provisions about payment restrictions, enforcement rights, and creditor obligations. It's particularly important in scenarios involving group company loans, shareholder funding, or multiple banking arrangements.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Your data doesn't train Genie's AI
You keep IP ownership聽of your docs
1. Date and Parties: Identifies the date of the letter and all relevant parties - the debtor, senior creditor(s), and subordinated creditor(s)
2. Reference to Existing Facilities: Identifies the relevant loan agreements, facilities, or debt instruments that are subject to subordination
3. Definitions: Defines key terms such as Senior Debt, Subordinated Debt, Enforcement Action, and other relevant terms
4. Subordination Declaration: Clear statement of subordination, establishing that the subordinated debt ranks behind the senior debt
5. Payment Restrictions: Details of restrictions on payments of subordinated debt while senior debt remains outstanding
6. Turnover Provisions: Requirements for subordinated creditors to turn over any unauthorized payments to senior creditors
7. Duration and Release: Period of effectiveness and conditions for release from subordination obligations
8. Governing Law: Specification of Indian law as the governing law
9. Execution Block: Signature blocks for all parties
1. Security Interests: Required when the subordination affects secured debts, detailing the priority of security interests
2. Permitted Payments: Include when certain payments to subordinated creditors are allowed under specific conditions
3. Standstill Provisions: Include when subordinated creditors need to agree to specific restrictions on enforcement actions
4. Additional Creditor Accession: Required when new creditors may join the subordination arrangement in the future
5. Cross-Default Provisions: Include when default under one facility should trigger subordination effects across other facilities
6. Inter-creditor Provisions: Required when multiple creditors need to establish their relative rights and obligations
1. Schedule 1 - Details of Senior Debt: Comprehensive list of all senior debt facilities, including amounts, dates, and key terms
2. Schedule 2 - Details of Subordinated Debt: Comprehensive list of all subordinated debt facilities, including amounts, dates, and key terms
3. Schedule 3 - Form of Accession Deed: Standard form for new creditors to accede to the subordination arrangements
4. Schedule 4 - Payment Conditions: Detailed conditions under which payments to subordinated creditors may be permitted
5. Appendix A - Notice Requirements: Templates and procedures for various notices required under the subordination arrangement
Find the exact document you need
Bank Subordination Agreement
An Indian law-governed agreement establishing priority rights between senior and subordinated bank lenders, defining their respective rights and obligations in lending arrangements.
Download
Attornment Agreement
An Indian law-compliant agreement establishing the legal relationship between an existing tenant and new landlord following property ownership transfer.
Download
Lien Subordination Agreement
An Indian law-governed agreement that establishes priority rankings between different security interests held by multiple lenders over the same collateral.
Download
Attornment And Non Disturbance Agreement
An Indian law agreement establishing rights and obligations between landlord, tenant, and lender, ensuring lease continuation during property ownership changes.
Download
Lease Subordination Agreement
An Indian law agreement establishing priority between a property lease and mortgage, ensuring the lease is subordinate to the lender's security interests.
Download
Landlord Lien Subordination Agreement
An Indian law agreement that subordinates a landlord's lien rights to a lender's security interest in tenant's property located within leased premises.
Download
Real Estate Subordination Agreement
An Indian law-governed agreement establishing priority of security interests between multiple lenders against real estate property, defining hierarchical relationships between different security interests.
Download
Letter Of Subordination Of Debts
An Indian law-governed document establishing debt priority arrangements between creditors, where subordinated creditors agree to rank their claims behind senior creditors.
Download
Intercreditor And Subordination Agreement
An Indian law-governed agreement establishing priorities and relationships between multiple creditors, defining debt rankings and enforcement rights.
Download
Non Disturbance Agreement
An Indian law agreement ensuring tenant's lease rights survive landlord's mortgage default and foreclosure, establishing protections between lender, landlord, and tenant.
Download
骋别苍颈别鈥檚 Security Promise
Genie is the safest place to draft. Here鈥檚 how we prioritise your privacy and security.
Your documents are private:
We do not train on your data; 骋别苍颈别鈥檚 AI improves independently
All data stored on Genie is private to your organisation
Your documents are protected:
Your documents are protected by ultra-secure 256-bit encryption
We are ISO27001 certified, so your data is secure
Organizational security:
You retain IP ownership of your documents and their information
You have full control over your data and who gets to see it