Who writes the intercreditor.

Most sponsors let the senior lender pick the intercreditor terms.

That is the moment the operator's freedom of action for the next eighteen months gets decided. The standstill provisions. The payment block triggers. The remedies waterfall. The cure rights. The notice periods.

The senior lender's outside counsel writes the intercreditor. The mezz lender's outside counsel marks it up. The independent sponsor's lawyer reviews both and is usually outnumbered.

The senior lender's counsel is paid to protect the senior lender. That is correct, that is their job, and it is not a criticism. But it means the standstill periods get written long, the payment block triggers get written broad, and the remedies waterfall gets written to favor the senior in any scenario that can be plausibly characterized as a default.

What does not get pushed on enough is the impact on the operator.

The operator is not in the room. The operator does not understand that a covenant default at month fifteen, even if technical and even if cured within two weeks, can trigger a 120-day payment block on mezz that has cascading effects on the operating thesis. The operator does not realize that the senior's discretion to declare a "material adverse change" is broad enough to capture a slow integration of the first add-on.

The independent sponsor's lawyer has to be in the room speaking for the operator. That is a different job than reviewing the legal language for accuracy. It is stress-testing the intercreditor against the operating plan and pushing back on every provision that constrains the platform.

Specifically: Standstill on payment defaults: 90 days, not 180. With a clear definition of what triggers it. Carve-outs from payment blocks for: covenants that have been previously cured, technical compliance failures, and any default arising from an add-on acquisition that was pre-approved. Cure rights: at least three cures in any twelve-month period for equity holders. With a clear definition of what constitutes a cure. Notice periods: at least 30 days between default declaration and remedy exercise.

Read the intercreditor before the credit agreement. The credit agreement controls the money. The intercreditor controls the room.