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Senior Promissory Note for Philippines

Senior Promissory Note Template for Philippines

A Senior Promissory Note governed by Philippine law is a formal financial instrument that evidences a senior debt obligation where one party (the maker/issuer) makes an unconditional written promise to pay a specified sum of money to another party (the payee/holder), with priority over other debt obligations. The document is structured in accordance with the Philippines' Negotiable Instruments Law (Act No. 2031) and must meet specific requirements for validity and enforceability under Philippine jurisdiction. It includes detailed terms regarding interest rates, payment schedules, events of default, and remedies, while establishing the senior ranking of the obligation in the maker's debt hierarchy.

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What is a Senior Promissory Note?

A Senior Promissory Note is commonly used in the Philippines for documenting significant debt obligations where the lender requires priority status over other creditors. This document type is particularly relevant when businesses or individuals need to secure substantial financing while providing lenders with enhanced security through senior ranking. The Senior Promissory Note must comply with Philippine legal requirements, including the Negotiable Instruments Law and relevant Central Bank regulations. It typically contains comprehensive details about payment terms, interest calculations, events of default, and enforcement mechanisms. The senior status of the note means it takes precedence over subordinated or junior debt in terms of payment priority, making it an attractive instrument for primary lenders and financial institutions operating in the Philippine market.

What sections should be included in a Senior Promissory Note?

1. Parties: Identification of the maker/promisor (debtor) and payee/promisee (creditor) with complete legal names and addresses

2. Promise to Pay: Unconditional promise to pay a specific sum of money, including the principal amount and currency

3. Interest Rate: Specification of the interest rate, calculation method, and payment frequency

4. Payment Terms: Details of payment schedule, maturity date, and method of payment

5. Senior Status: Declaration of the note's senior status and priority in relation to other debt obligations

6. Events of Default: Definition of events that constitute default and their consequences

7. Remedies: Rights and remedies available to the holder upon default

8. Governing Law: Specification of Philippine law as the governing law

9. Signature Block: Space for signatures, dates, and witnesses as required by Philippine law

What sections are optional to include in a Senior Promissory Note?

1. Security: Details of any collateral or security provided for the note, used when the note is secured

2. Guaranty: Terms of any guarantees provided by third parties, included when there are guarantors

3. Prepayment Provisions: Terms and conditions for early repayment, included when prepayment is allowed

4. Transfer Restrictions: Limitations on transfer or assignment of the note, used when transferability needs to be restricted

5. Tax Provisions: Allocation of responsibility for taxes and withholding requirements, included when tax implications need to be addressed

6. Registration Rights: Terms for registration of the note with relevant authorities, included for notes that may be registered

7. Subordination Terms: Detailed terms of subordination to specific senior debt, included when there are complex priority arrangements

What schedules should be included in a Senior Promissory Note?

1. Payment Schedule: Detailed amortization table showing payment dates, principal and interest amounts

2. Interest Calculation Examples: Examples demonstrating the method of interest calculation

3. Description of Collateral: Detailed description of any security or collateral (if applicable)

4. Form of Notice: Standard format for notices required under the note

5. Related Party Details: Information about guarantors or other related parties (if applicable)

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Ƶ

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions





































Clauses






























Relevant Industries

Banking & Financial Services

Corporate Finance

Real Estate & Property Development

Manufacturing & Industrial

Infrastructure & Construction

Energy & Utilities

Telecommunications

Healthcare

Retail & Consumer Goods

Technology & Software

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Secretariat

Credit Administration

Banking Operations

Accounts Payable

Document Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Counsel

Legal Director

Financial Controller

Credit Manager

Risk Manager

Compliance Officer

Corporate Secretary

Account Manager

Investment Officer

Senior Finance Manager

Legal Counsel

Banking Relationship Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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