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Loan Facility Agreement for United Arab Emirates

Loan Facility Agreement Template for United Arab Emirates

A comprehensive loan facility agreement template designed for use in the United Arab Emirates, compliant with UAE Federal Laws and Central Bank regulations. This agreement governs the terms and conditions of commercial lending arrangements, including conventional and potential Islamic financing structures. It addresses key aspects such as facility terms, security arrangements, representations and warranties, covenants, and enforcement mechanisms, all within the UAE legal framework. The document incorporates specific UAE requirements regarding interest calculations, security registration, and enforcement procedures.

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Loan Facility Agreement

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What is a Loan Facility Agreement?

The Loan Facility Agreement Template serves as a foundational document for commercial lending transactions in the United Arab Emirates. It is designed for use when establishing credit facilities between financial institutions and borrowers, incorporating both conventional and Islamic financing options where required. The template ensures compliance with UAE Federal Laws, Central Bank regulations, and local commercial practices. It covers essential elements including facility terms, security arrangements, conditions precedent, representations, covenants, and enforcement mechanisms. This document is particularly relevant for transactions subject to UAE law and jurisdiction, providing a structured framework that can be customized based on specific transaction requirements while maintaining regulatory compliance.

What sections should be included in a Loan Facility Agreement?

1. Parties: Identification of the lender(s), borrower(s), and any guarantors or security providers

2. Background: Context of the facility, purpose of the loan, and relationship between parties

3. Definitions and Interpretation: Comprehensive definitions of terms used and rules of interpretation

4. The Facility: Details of the loan amount, purpose, availability period, and drawdown conditions

5. Interest and Fees: Interest calculation, payment periods, default interest, and applicable fees

6. Repayment Terms: Repayment schedule, prepayment provisions, and payment mechanics

7. Conditions Precedent: Prerequisites for drawdown and continuing conditions

8. Representations and Warranties: Statements of fact and assurances given by the borrower

9. Covenants: Positive and negative undertakings by the borrower

10. Events of Default: Circumstances constituting default and consequences

11. Security: Details of security arrangements and enforcement rights

12. Changes to Parties: Assignment and transfer provisions

13. Administration: Payment mechanics, calculations, and notices

14. Governing Law and Jurisdiction: Choice of UAE law and jurisdiction provisions

What sections are optional to include in a Loan Facility Agreement?

1. Islamic Finance Provisions: Alternative provisions for Sharia-compliant financing, used when the facility needs to comply with Islamic finance principles

2. Syndication Provisions: Additional terms for multiple lenders, used in syndicated facilities

3. Accordion Facility: Provisions for increasing the facility amount, included when facility may need to be expanded

4. Multi-currency Provisions: Terms for different currency drawings, used for multi-currency facilities

5. Agency Provisions: Terms relating to facility agent's role, required for syndicated facilities

6. Security Trust Provisions: Terms for security trustee arrangements, used in complex security structures

7. Regulatory Compliance: Specific compliance requirements, included for regulated borrowers

8. Green Loan Provisions: Specific terms for green/sustainable financing, used for ESG-linked facilities

What schedules should be included in a Loan Facility Agreement?

1. Schedule 1 - Conditions Precedent: Detailed list of required documents and conditions

2. Schedule 2 - Form of Drawdown Request: Template for borrower to request loan disbursement

3. Schedule 3 - Repayment Schedule: Detailed amortization or repayment schedule

4. Schedule 4 - Form of Transfer Certificate: Template for transferring loan participations

5. Schedule 5 - Security Documents: List and copies of security documentation

6. Schedule 6 - Financial Covenants: Detailed financial ratios and calculations

7. Schedule 7 - Forms of Compliance Certificate: Template for periodic compliance reporting

8. Appendix A - Facility Summary: Key commercial terms summary

9. Appendix B - Contact Details: Administrative and notice details for all parties

10. Appendix C - Processing Fees: Breakdown of all applicable fees and charges

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions


















































Clauses



































Relevant Industries

Banking & Financial Services

Real Estate & Construction

Manufacturing & Industrial

Retail & Consumer Goods

Healthcare & Pharmaceuticals

Technology & Communications

Energy & Utilities

Transportation & Logistics

Hospitality & Tourism

Professional Services

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit

Commercial

Corporate Finance

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Compliance Officer

Credit Risk Manager

Relationship Manager

Corporate Banking Officer

Finance Manager

Commercial Director

Legal Director

Investment Manager

Corporate Finance Manager

Business Development Manager

Risk Assessment Officer

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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