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.
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.
Are pro rata and pari passu the same?
In banking, pari-passu is typically used in the context of unsecured debt, which are bonds or loans not backed by collateral. … Pro-rata refers to proportionally distributing profits and obligations, and pari-passu refers to the rank and seniority of the obligations — i.e., that they are “on equal footing.”
What is pari passu equity?
In a private equity deal, pari passu describes when a right or obligation associated with a class of stock or investors (for example, the right to receive dividends or the obligation to make capital contributions) applies equally to more than one category of shareholders.
How do you use pari passu in a sentence?
used in legal language.
- There three cars made a pari passu advance.
- Inflation and interest rates are increasing pari passu.
- Liberty and law advance pari passu.
- The new share will rank pari passu with the existing one.
- All the new shares rank pari passu with the existing shares in all respects.
What is the meaning of pari?
pari- combining form. equal or equally; even (in number)parisyllabic; paripinnate.
How do you use ipso facto?
You use ipso facto when you have a fact or an action, and you want to show that it’s a direct consequence of another fact or action. Here’s an example: Peter’s son was born in Argentina and he ipso facto has a claim to Argentinean citizenship. In this case, ipso facto precedes the word it modifies.