Finance Deals & Syndicated Lending · glossary
Latin for “on an equal footing”. The borrower promises that this debt ranks equally with its other unsecured debt. It gives the lenders no priority, and protection against secured creditors comes from the negative pledge. Clause 15.9 · Chapter 8
Explained in Chapter 8, Representations, of Finance Deals & Syndicated Lending.
Also explained in Shareholders' Agreements and Venture Deals.
Pari passu means “on an equal footing”. Clause 15.9 promises only that this debt ranks equally with the borrower's other unsecured debt, apart from creditors the law prefers. It does not promise payment, and it puts the lenders ahead of nobody. Protection against secured creditors is the job of the negative pledge in clause 18.2.Read Chapter 8, Representations →
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