Priority arrangements with alternative lenders | Lombard

Priority arrangements with alternative lenders

Customer message

This page is aimed at other lenders, not our customers. If you are a customer who is obtaining finance elsewhere and require us to enter in to security arrangements with the alternative lender, then please contact your relationship manager or your usual Lombard point of contact at the earliest opportunity so that we can ensure a swift decision.

The content is aimed at alternative lenders who wish to enter into priority arrangements with Lombard in line with the Deeds of Priority and Waiver BBA protocol.

As part of the Royal Bank of Scotland Group, we understand that there are different forms of finance available in the wider market and are fully committed to supporting our customers who wish to consider these alternatives alongside our own facilities.

Where an alternative lender requests us to agree to our customer granting security over assets already secured to us, agree the ranking of priorities of securities or effect a release of assets (e.g. purchased debts) from our existing security, then we strive to reach a decision and finalise the legal paperwork as quickly as possible.

Together with other major banks, we've signed up to a protocol for dealing with such matters, the details of which are set out in the following BBA customer factsheet.

BBA customer factsheet (120kB pdf)

While the protocol is primarily aimed at banks, Lombard has agreed to fulfilling the same commitments. In order to do so, we set out below examples of our standard form documents and provide details of our central coordination point.

Standard documentation

The documents in the table below are merely examples of our standard forms used for agreeing the ranking priority of securities and releasing assets from security. You will see that they are marked ‘sample’ and can not therefore be used for actual transactions.

Priority Deed

Used to regulate the ranking of two legal charges granted over property situated in England or Wales.

Example template Scenario
Priority Deed,
company/LLP,
Lombard Lender Limited,
all assets

(47kB pdf)
Customer is a company or LLP Lombard’s charge ranks first for a fixed amount plus interest and charges; alternative lender’s charge second for a fixed amount plus interest and charges; and Lombard’s charge third to an unlimited extent.
Priority Deed,
Individual/Partnership,
Lombard Unlimited,
Charged Property

(40kB pdf)
Customer is an individual or partnership – Lombard’s charge ranks first to an unlimited amount and alternative lender’s charge second to an unlimited amount.
Priority Deed,
Company/LLP,
Lombard Limited,
charged property

(42kB pdf)
Customer is a company or LLP. Lombard’s charge ranks first for fixed amount plus interest and charges and alternative lender’s charge second to an unlimited amount.
Priority Deed,
Individual/Partnership,
sharing legal charges

(42kB pdf)
Customer is an individual or partnership. 
Charges rank equally, with distributions made in proportion to sums outstanding under each at enforcement, up to capped amounts.

Ranking agreement (Scotland)

Used to regulate the ranking of standard securities and/or floating charges granted over property in Scotland.

Example template Scenario
Ranking
agreement 

(39kB pdf)
Various rankings can be accommodated within the agreement – tailoring required.
For standard security transactions, solicitors will always be involved.

Deed of postponement

Used to create a simple priority agreement in relation to twp legal charges granted over property in England or Wales.

Example template Scenario
Deed of postponement
(31kB pdf)

Alternative lender’s charge ranks first for a fixed amount together with interest, charges and expenses and Lombard’s charge second to an unlimited extent. 
Often used where the alternative lender wishes to advance further sums and requires increased priority.

Deed of Priority   

Used where Lombard holds a charge over specified assets.

Example template Scenario

Deed of Priority
(Non-vesting debts and
all other assets)
(48kB pdf)

For factoring and invoice discounting arrangements. 

Transactions should normally be initiated with us by the customer contacting their relationship manager at the earliest opportunity to discuss the security requirements.

Once the customer has provided us with all the information which we require, and we have considered (and agreed) the request, we will produce the required documentation which will then be provided to you for signing.

One of our standard requirements is a Letter of Consent from the customer authorising us and you as alternative lender to disclose confidential information to each other, as may be required to agree the security arrangements.

A suitable style which you may wish to print and have the customer sign is provided below, although we are of course happy to accept your own standard form or a letter from the customer, providing it contains the same minimum information.

Deed of Priority consent form (105kB pdf)

While use of our agreed standard forms is likely to result in the speediest conclusion of the paperwork, we will of course be willing to consider using one of your own standard forms, where appropriate.

If neither of us have a mutually acceptable standard form then negotiations may be required to agree the precise terms of a bespoke form. Time should be allowed to conclude such negotiations, particularly where either or both of us require to instruct solicitors to act on our behalf.

In such cases it may be appropriate to establish the final negotiated form as a pre-agreed form to facilitate future transactions (saving time and expense). We will be happy to consider such requests. Where such a pre-agreed form already exists, this should be used wherever possible.

If you have any questions regarding our standard forms or would like to speak to us about establishing a pre-agreed form for future use then you may contact us at TSD@lombard.co.uk. We will endeavour to provide an initial response to you within two business days.

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