What is Pari Passu?
It is key that investors and lenders understand where they stand in the repayment queue should a company default. In this video Tim discusses the pari passu clause, a standard feature in debt agreements ensuring creditors are aware of when they will be repaid, in relation to other lenders.
Overview
The pari passu clause is a standard feature in debt agreements to ensure investors and lenders are aware of when they will be repaid, in relation to the other lenders, in the event the company becomes insolvent.
Key learning objectives:
Define pari passu
Understand the importance of the pari passu clause
Explain why the pari passu clause is different in a sovereign debt document
Summary
Expert
Tim Skeet
Banker with more than 35 years experience in the financial markets. Tim has been an ICMA board member and an ECBC steering committee member. Tim is a Freeman of the City of London.
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