Facility Letter And Loan Agreement

For more information on the Cannais provisions of facilitated contracts, visit the Loan Markets Association or the Association of Corporate Treasure. NOTE: This agreement should not be governed by the Consumer Credit Act 1974, which requires that companies that lend money to consumers be licensed by LE OFT. This agreement is not intended for consumption; Trade without a permit is punishable and may result in a fine and/or imprisonment. Borrowers: The definition of the borrower includes all group companies that require access to the loan, including revolving credits (flexible credits as opposed to a fixed amount repaid in increments) or the working capital component. This should also include all target companies acquired with the funds made available. Subsidiaries that need a provision may need to join the group of borrowers. If there is a reason why the affected companies cannot be parties to the agreement when they are executed – for example. B in the event of an acquisition by limited companies – prior approval from the bank would be required for them to be included in the agreement at a later date. If there are foreign companies in the group, it is worth asking whether they will have access to credit facilities or how. The facility agreement may also designate an individual borrower and allow that borrower to continue lending to other members of his or her group of companies. Interest: The interest margin should reflect the range set in the lender`s letter of offer/credit sheet. Libor and the bank`s mandatory fees must also be paid. All provisions relating to the increase or reduction of the interest margin (called „clique margina“) should also correctly reflect the lender`s letter/offer sheet.

Businesses or financial alliances govern the borrower`s financial situation and health. They define certain parameters in which the borrower must operate. The borrower`s auditors should be asked to view their contents as soon as possible. The dates on which these companies are subject to review should be subject to scrutiny, as should the separate financial definitions applicable. Financial commitments are a key element of any facility agreement and are probably the most likely to cause a default event if they are breached. Stronger borrowers can negotiate a right to resolve violations of financial pacts, for example by investing more money in the business. This is called the equity cure. Some of the key definitions contained in any facility agreement are that the existence of a union will not affect certain other provisions of an facility agreement. For example, there will also be a definition of „majority lenders“ that is required for approval for certain measures. It is normal for this definition to amount to two-thirds of syndicated banks based on the amount of their interest in the loan.