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What happens to a 'Lien' if the underlying debt is refinanced?

1. The existing lien is automatically reassigned and transferred over to the new lender, with no administrative filing or action required from the borrower at all.
2. The new refinancing indebtedness is required to remain entirely unsecured for at least one full year in order to avoid breaching the borrower's negative pledge covenant.
3. The existing lien is typically released, and a new lien is granted by the borrower to secure the refinancing debt, subject to the 'Permitted Refinancing' carve-outs.
4. The original lien stays in place on the asset, but its repayment priority is then automatically downgraded to a junior, subordinated status upon any refinancing event.

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