easy · Debt Capital Markets primary-issuance-syndication

In a 'club deal', the 'Agreement Among Lenders' or similar documentation is important because:

1. It lets the lead arranger unilaterally cancel scheduled interest when the borrower is a 'good friend'.
2. It mandates that the outstanding bonds must automatically convert into equity once the issuer's price rises.
3. It defines how the group of banks will share the interest, principal, and any voting rights over the debt.
4. It guarantees that the club's bonds can always be freely sold onward to retail investors at any time the lenders wish.

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