What is the pari passu principle?

The pari passu principle means that all unsecured creditors in insolvency processes, such as administration, liquidation and bankruptcy must share equally any available assets of the company or individual, or any proceeds from the sale of any of those assets, in proportion to the debts due to each creditor.

What does pari passu mean in investing?

equal footing
Pari-passu is a Latin phrase meaning “equal footing” that describes situations where two or more assets, securities, creditors, or obligations are equally managed without preference.

What is pari passu in banking?

Pari-passu—Latin for “equal footing”—is a financing arrangement that gives multiple lenders equal claim to the assets used to secure a loan. If the borrower is unable to fulfil the payment terms, the assets can be sold, and each lender receives an equal share of the proceeds at the same time.

Is pari passu the same as pro rata?

In short, the difference between the two terms is that pari-passu refers to the relationship between investors, and pro-rata refers to how funds are distributed between them.

How is pari passu charge created?

This type of charge created through common documents on behalf of multiple banks is called Pari-Passu charge. Law requires such charges on assets of the company to be registered at ROC within 30 days from the date of creation of charge or such extended time permitted by the ROC.

What is the opposite of pari passu?

biasedly	inequitably
unfairly	with unequal force
somewhat	partly
moderately	relatively
half	incompletely

What is first ranking pari passu charge?

“Pari Passu” charge means that when borrower company goes into dissolution, the assets over which the charge has been created will be distributed in proportion to the creditors’ (lenders) respective holdings.

What is consortium financing?

Like a loan syndication, consortium financing occurs for transactions that might not take place with a single lender. Several banks agree to jointly supervise a single borrower with a common appraisal, documentation, and follow-up and own equal shares in the transaction.

What is meant by pro rata?

Pro rata is a Latin term used to describe a proportionate allocation. If something is given out to people on a pro rata basis, it means assigning an amount to one person according to their share of the whole.

What is pari passu NOC?

If the bank is lending against the same security to the company, against which the latter has already drawn funds from his existing lender, the bank has to get a pari passu letter from the first lender, which creates an equal charge for both banks on the security. …

What is meant by negative lien?

Negative Lien is used in banking idiom for a borrower to undertake not to make any charge on his property without the sanction of the lender. Under the negative lien, the Banker does not get right to keep any asset of the borrower.

What is parity debt?

Parity Debt means any debt obligations issued that are on an equal commercial lien position with this Loan.

Who is the judge for the pari passu clause?

The Republic of Argentina the interpretation of the ‘pari passu’ clause provided under sovereign bonds issued by Argentina is being resolved by Judge Thomas Griesa of the United States District Court for the Southern District of New York and the US Court of Appeals for the Second Circuit.

What was the pari passu clause in the FAA?

The cornerstone argument of the plaintiffs in the NML case is that the ‘pari passu’ clause provided under the FAA Bonds requires Argentina to make payments to the plaintiffs in the event a payment will be made under the Exchange Bonds. The Pari Passu Clause contained in the FAA provides as follows:

What is the pari passu clause in a sovereign bond?

A pari passu clause included in sovereign bond issuances usually reads that the bonds rank pari passu with each other and with other unsecured (payment) obligations of the issuer.3This can be read as “equal among equals” and that bondholders are in the same ranking as other unsecured creditors.