Bilateral facility agreement meaning

Points to consider What is the most appropriate method of transfer? Consider: Think about whether you are transferring rights alone (eg drawn commitments) or also obligations (eg undrawn commitments). An assignment passes only rights, whereas a novation passes both rights and obligations. Novation is usually favoured for loan transfers because it conveys rights and duties together. If assignment is adopted, the obligations can be moved by novation. For more detail, see Practice Note: Transferring a loan by assignment. Whether consent can be obtained from the borrower? By law, an assignment does not require the counterparty’s consent. However, the facility agreement will often require borrower consent for an assignment, and for a novation as well. Sub-participation is sometimes used to transfer loans on syndicated transactions where borrower consent cannot be obtained. That said, some deals may still require borrower consent for sub-participation. Whether the intention is for the transfer to be kept confidential from...

This Checklist This Checklist outlines key considerations for lawyers (external or in-house) acting for the lender(s) when responding to a borrower led amendment request. It concentrates on permanent amendments rather than one off waiver or consent requests. For guidance on those, see Practice Note: Waivers and consents. In a syndicated transaction, the borrower will ordinarily deliver a written amendment request to the facility agent, which typically includes: the rationale for seeking the amendment, the specific clauses impacted, the applicable consent thresholds, and any snooze and lose provisions. The Loan Market Association (LMA) has published a helpful guide to the amendment process on a syndicated transaction. On a bilateral deal, a borrower’s amendment request to the lender may take a less formal form. This Checklist also references provisions in the Loan Market Association investment grade multicurrency term and revolving facilities agreement incorporating backward-looking compounded rates and forward-looking term rates (the LMA Investment Grade Facility Agreement) and Precedent: Facility...

This Practice Note outlines the principal issues to take into account when altering an existing facility agreement. It covers: typical drivers and rationales for changing a facility agreement key considerations when amending a facility agreement in the context of a bilateral or syndicated transaction matters to address where guarantees or security are in place ways to document an amendment, including whether to use an amendment letter, an amendment agreement, or an amendment and restatement agreement usual conditions precedent to effectiveness points concerning fees, costs and expenses This Practice Note does not address one-off waivers and consents. For further information on waivers and consents, see Practice Note: Waivers and consents. For material on amending security documents, see Practice Note: Amending security documents. For general contract law guidance on varying a contract, see Practice Note: Contract variation. Common reasons for amending a facility agreement After execution of the facility agreement and once funding has taken place, the borrower’s situation...

This How to guide sets the groundwork for drafting and negotiating a security document. It links to helpful precedents and highlights key drafting and negotiation points. Practice Note: Introductory guide to security in a lending transaction gives a fuller overview of taking and perfecting security, covering types of security, perfection and priority. Practice Note: Debenture drafting and negotiation guide provides detailed guidance on drafting and negotiating a debenture. Parties The parties to a security document in a bilateral transaction will be: the security provider(s)—eg the borrower(s) under the facility agreement or a third party, such as group company guarantors or a parent company, or both; and the lender The parties to a security document in a syndicated transaction will be: the security provider(s)—the borrower(s) under the facility agreement or a third party, such as the group company guarantors or a parent company, or both; and the security agent, acting as trustee and security agent for the lenders...

Acquisition finance transactions In an acquisition finance transaction, beyond the debt—whether constituted by loans or bonds—needed to finance the deal, the borrower group will commonly require additional banking facilities. These might include, for example, an overdraft, a stand-by letter of credit facility or a foreign exchange facility, and can frequently all be delivered under the umbrella of a revolving credit facility (RCF) in the senior facilities agreement (SFA). The RCF will usually be capable of being drawn in three distinct ways: in cash (by way of revolving loans) as syndicated, non-cash facilities, eg letters of credit—these will be identified in the documentation; and in the form of bilateral lines known as ancillary facilities Unlike a revolving credit facility drawn in cash, ancillary facilities are not typically of a kind that lends itself to division amongst several lenders, so the documentation caters for their provision on a bilateral basis. For more on the revolving credit facility, in particular how revolving loans...

This Agreement, dated [ • ] 20[ • ], is entered into between the following parties: Parties [ insert name of Borrower ], a company incorporated in England and Wales with registered number [ insert company number ], whose registered office is at [ insert address ] (the Borrower); and [ insert name of Lender ] of [ insert address ] (the Lender). Background (A) [ insert description of background to transaction ]. (B) The Lender has agreed to provide the Facility (as defined below) to the Borrower on the terms and conditions contained in this Agreement...

[ To be printed on the headed paper of the lender ] [ insert date ] To: [ insert name and address of borrower ] [ and ] [ insert name and address of guarantor, if applicable ] Dear [ insert full name of borrower and, if applicable, full name of guarantor ] We make reference to the facility agreement dated [ insert date of facility agreement ] between [ insert name of borrower ] (the Borrower) and [ insert name of lender ] (the Lender), as varied, novated, supplemented, restated or substituted from time to time in accordance with its provisions (the Facility Agreement). [ We further refer to the guarantee dated [ insert date of guarantee ] between [ insert name of guarantor ] (the Guarantor) and the Lender, as varied, novated, supplemented, restated or substituted from time to time in accordance with its provisions (the Guarantee). ] ...

This Deed is dated [ insert day and month ] 20[ insert year ] Parties [ insert name of Assignor ], a company registered in England and Wales with company number [ insert company number ], whose registered office is at [ insert address ] (the Assignor); and [ insert name of Lender ] of [ insert address ] (the Lender). Recitals: (A) The Lender has agreed to provide a loan facility to the Assignor on the terms and conditions contained in the Facility Agreement (as defined below). (B) Availability of the loan facility is conditional upon the Assignor executing this Deed to create security in favour of the Lender in respect of the Secured Obligations (as defined below)...