Bracewell ( UK ) LLP / Anglo Pacific Group PLC 7
Conclusions
As the prevalence of alternative forms of mining finance , including stream and royalties , has increased , so has the complexity of the arrangements between the various providers of that finance . Somewhat counter-intuitively , these arrangements could lead a Royalty Holder to take the view that its interests are better served not being a secured creditor , meaning that they can argue that they should not be subjected to the terms of an intercreditor agreement .
If the security package on offer is limited in scope and would not , as a practical matter , offer any monetary value in an enforcement scenario , consideration may be given as to whether a Royalty Holder would have better rights against the mining company as an unsecured creditor ( if the royalty “ runs with the land ”), as there would be no intercreditor restrictions on its ability to enforce its rights or prove its debt claim in an insolvency scenario .
As there is no absolute standard form or model for intercreditor arrangements for project finance , streaming and royalties , we expect that the market will continue to evolve and provide opportunities for agile market participants to leverage their expertise and know-how .
Endnotes
1 . Loan Market Association : https :// www . lma . eu . com / docu ments-guidelines / documents .
2 . Loan Syndications and Trading Association : https :// www . lsta . org / content / the-lstas-complete-credit-agreementguide-second-edition .
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