The material we have published so far via intercreditor agreements has focused mainly on structural, security and enforcement rights – but don`t forget the importance of hedge counterparties in financing real estate. The LMA has considered this issue and the ICA contains many provisions that are relevant to a hedge fund counterparty in a real estate financing transaction. These provisions are well summarized in the LMA`s use manual, which is attached to the ICA, and summarized below. As the user manual points out, the ICA is only a starting point and needs to be significantly modified depending on the possible structure of the agreement. A concept sheet explaining the position of the cover counterparts and a backup strategy document are therefore highly recommended. The following three areas are taken into account: (i) general assumptions; (ii) order of priority and vote; and (iii) restrictions and authorizations. (i) General AssumptionsThe ICA is based on a series of general assumptions as follows: as with any borrowing agreement (whether included in a subscription or capital facility or not in a separate inter-credit margin), priority lenders and hedge counterparties must carefully consider the issues that may affect them in the context of the underwriting facility and/or guarantee agreements and, if so, to what extent they should have a say in this matter. It is interesting to note that speculative counterparties may indeed seek “more general” protection measures in a loan-to-capital agreement under a hedge fund ease agreement than is the case in the corresponding LMA published in the LMA documentation. Hedging liabilities are generally defined by reference to market debts that apply to a guarantee contract on a given date and by reference to debts in the event of termination or closing of coverage. In any event, anticipating the level of liability is difficult because security liabilities (regardless of their assessment) can vary considerably. The integration of warranty schemes into capitalization/subscription organizations is a relatively complex and developing area. We are looking at these developments with interest and, as with some other aspects of current underwriting and capital funding, this could be an area that we are taking up in light of these developments.