��������Ƶ

A Subordination Agreement lets one creditor voluntarily step back and give priority to another creditor's claim on the same asset. In Hong Kong's competitive lending market, these agreements often come into play when businesses need additional financing while keeping existing loans in place.

Banks and financial institutions commonly use these agreements to rearrange payment priorities, especially in property financing and corporate restructuring. For example, a first mortgage lender might agree to subordinate their claim to a new business loan, helping the borrower access more capital while protecting both lenders' interests under Hong Kong's secured transactions framework.

Use a Subordination Agreement when you need to bring in new financing while keeping existing loans in place. This commonly happens in Hong Kong when property developers seek construction loans on top of existing mortgages, or when companies need additional working capital secured by already-pledged assets.

The timing matters most during business expansion, debt restructuring, or when pursuing time-sensitive market opportunities. For example, if your company needs urgent capital for a major equipment purchase, a Subordination Agreement can help convince a new lender to extend credit by giving them priority over existing creditors - making the deal possible while keeping everyone's interests protected.

• Deed Of Subordination: The most formal version, typically used for high-value property transactions and corporate financing in Hong Kong, offering strongest legal protection
• Intercreditor Agreement: Used when multiple lenders are involved, defining complex priority arrangements and establishing detailed creditor rights
• Attornment And Non Disturbance Agreement: Combines subordination with tenant protection clauses, commonly used in commercial real estate financing to preserve lease rights

• Primary Lenders: Banks, financial institutions, or other creditors who agree to subordinate their existing security interests to enable new financing
• Secondary Lenders: New creditors who gain priority position through the Subordination Agreement, often providing additional working capital or specific-purpose loans
• Corporate Borrowers: Companies seeking to arrange multiple layers of financing while maintaining good relationships with all lenders
• Legal Counsel: Hong Kong solicitors who draft and review these agreements to ensure compliance with local security and lending regulations
• Company Directors: Authorized signatories who execute the agreement on behalf of corporate entities

• Existing Loan Details: Gather all current loan agreements, security documents, and payment schedules from existing lenders
• New Financing Terms: Document the proposed new loan amount, interest rates, and security arrangements
• Asset Information: Compile details of all assets involved, including current market values and existing encumbrances
• Party Details: Collect full legal names, registration numbers, and authorized signatories of all involved parties
• Document Generation: Use our platform to create a customized Subordination Agreement that automatically includes all required Hong Kong legal elements
• Final Review: Cross-check all payment priorities, security interests, and enforcement rights before signing

• Party Identification: Full legal names and details of all creditors, debtors, and any guarantors involved
• Debt Description: Clear identification of both senior and subordinated debts, including amounts and security interests
• Priority Terms: Explicit language establishing payment rankings and security interest priorities
• Enforcement Rights: Specific provisions about when and how each creditor can exercise their rights
• Governing Law: Express statement that Hong Kong law governs the agreement
• Execution Block: Proper signature sections for all parties, with company chops where required
• Notice Provisions: Clear procedures for communications between parties

While a Subordination Agreement and an Assignment Agreement both deal with debt and security interests, they serve distinctly different purposes in Hong Kong's financial landscape. Let's explore their key differences:

• Primary Function: Subordination Agreements rearrange existing priority rights between creditors, while Assignment Agreements transfer rights or obligations from one party to another
• Timing of Use: Subordination typically occurs when new financing is needed while keeping existing loans, whereas Assignment happens when completely transferring rights or obligations
• Party Structure: Subordination involves multiple creditors adjusting their rankings, while Assignment usually involves just three parties: assignor, assignee, and the counterparty
• Legal Effect: Subordination modifies priority without changing ownership of rights, while Assignment creates a complete transfer of legal interests