Priority of issues with floating security (art. 331 LGS)
Article 331 of the General Companies Law prohibits issuing new debentures with floating security that are senior or pari passu without the consent of the assembly of debenture holders.
What article 331
Article 331 governs priority among issues of debentures with floating security.
Once debentures with floating security have been issued, others may not be issued that have priority over or must be paid pari passu with the former, without the consent of the assembly of debenture holders.
Source: Law 19.550, art. 331 — InfoLEG (updated official text)
Commentary
It prevents a later issue from diluting the security of the earlier one: the first debenture holders must consent to any new issue that equals or exceeds their ranking.
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