Document background
The Subordinated Loan Agreement is used when parties wish to establish a lending arrangement where the lender's claims are contractually subordinated to other specified creditors. This type of agreement is particularly common in Hong Kong for regulatory capital arrangements in financial institutions, corporate group restructurings, and project finance transactions. The document addresses key aspects including subordination mechanics, payment restrictions, limited enforcement rights, and regulatory compliance requirements under Hong Kong law. It's essential for capital structure planning and often interfaces with regulatory requirements, particularly when used by authorized institutions under Hong Kong Monetary Authority supervision. The agreement typically requires careful consideration of existing senior debt arrangements and may need to align with intercreditor arrangements.
