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Facility Agreement Loan for South Africa

Facility Agreement Loan Template for South Africa

A comprehensive legal agreement governed by South African law that establishes the terms and conditions of a loan facility between a lender and borrower. The document details the facility amount, interest rates, repayment terms, security arrangements, representations and warranties, covenants, and events of default, all in compliance with South African banking regulations, the National Credit Act, and other relevant legislation. It includes specific provisions for South African market conditions and regulatory requirements, including exchange control regulations where applicable.

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Facility Agreement Loan

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What is a Facility Agreement Loan?

The Facility Agreement Loan is a fundamental document in South African commercial lending, used to establish and govern the relationship between lenders and borrowers in credit transactions. This agreement is essential when a party requires substantial financing, whether for general corporate purposes, specific projects, or acquisitions. The document must comply with South African banking regulations, including the National Credit Act, Financial Intelligence Centre Act, and where applicable, exchange control regulations. It contains detailed provisions covering facility terms, drawdown mechanics, repayment obligations, security arrangements, and various protections for both lender and borrower. The agreement is particularly important in the South African context where specific regulatory requirements must be met, especially regarding interest rate calculations, consumer protection (where applicable), and security registration.

What sections should be included in a Facility Agreement Loan?

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

2. Background: Context of the facility and purpose of the loan

3. Definitions and Interpretation: Defined terms, interpretation rules, and references to South African legal concepts

4. The Facility: Nature, purpose, and amount of the facility

5. Conditions Precedent: Documents and conditions required before drawdown, including South African regulatory requirements

6. Utilisation: Process and requirements for drawing down the facility

7. Interest: Interest calculation, periods, and payment provisions compliant with South African usury laws

8. Repayment: Terms and schedule for repayment of the facility

9. Prepayment and Cancellation: Voluntary and mandatory prepayment provisions

10. Tax Gross Up and Indemnities: Tax provisions specific to South African context

11. Representations: Borrower representations including compliance with South African law

12. Information Undertakings: Financial and other information to be provided by the borrower

13. Financial Covenants: Financial maintenance and testing requirements

14. General Undertakings: Positive and negative undertakings by the borrower

15. Events of Default: Circumstances constituting default and consequences

16. Changes to Parties: Transfer and assignment provisions

17. Payment Mechanics: Payment procedures and currency provisions

18. Notices: Communication methods and addresses for notices

19. Governing Law and Jurisdiction: South African law as governing law and jurisdiction provisions

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

1. Security: Required if the facility is secured - details security arrangements and enforcement rights

2. Guarantee: Required if there are guarantors - terms of guarantee and indemnity

3. Multiple Lenders: Required for syndicated facilities - includes facility agent and security trustee provisions

4. Increased Costs: Used in sophisticated facilities to address regulatory changes affecting lenders' costs

5. Market Disruption: Used in larger facilities to address interest rate benchmark disruption

6. Anti-corruption Laws: Detailed provisions for compliance with anti-corruption laws, particularly in corporate lending

7. Exchange Control: Required for cross-border facilities involving South African exchange control regulations

8. National Credit Act Provisions: Required if the borrower is a consumer or small business covered by the NCA

What schedules should be included in a Facility Agreement Loan?

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

2. Form of Utilisation Request: Standard form for drawing down the facility

3. Form of Transfer Certificate: Template for transferring lender commitments

4. Form of Compliance Certificate: Template for financial covenant compliance certification

5. Repayment Schedule: Detailed amortization schedule if term loan

6. Financial Covenants Calculations: Detailed methodology for calculating financial covenants

7. Security Documents: List and copies of security documents if facility is secured

8. Existing Security: Details of permitted existing security over borrower assets

9. Required Insurance: Specifications for required insurance coverage

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

Jurisdiction

South Africa

Publisher

Ƶ

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions




























































Clauses








































Relevant Industries

Financial Services

Banking

Corporate Finance

Real Estate

Manufacturing

Mining

Retail

Agriculture

Technology

Healthcare

Construction

Energy

Infrastructure

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Credit

Corporate Finance

Commercial

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Lawyer

Legal Counsel

Compliance Officer

Credit Manager

Risk Manager

Banking Relationship Manager

Loan Officer

Finance Manager

Company Secretary

Managing Director

Financial Controller

Corporate Finance Manager

Transaction Manager

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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