Bank Loan Term Sheet for United Arab Emirates

Bank Loan Term Sheet Template for United Arab Emirates

A Bank Loan Term Sheet under UAE law serves as a preliminary document outlining the key commercial and legal terms of a proposed loan facility. It operates within the framework of UAE Federal Law No. 14 of 2018 (Central Bank Law) and related banking regulations, incorporating both conventional and Islamic banking principles where applicable. The document captures essential elements including facility amount, tenor, pricing, security package, and key covenants, while ensuring compliance with UAE Central Bank regulations and local banking practices. It forms the basis for the subsequent detailed loan agreement and related security documentation.

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What is a Bank Loan Term Sheet?

The Bank Loan Term Sheet is a crucial preliminary document used in the UAE banking sector to establish the fundamental terms and conditions of a proposed loan facility. It serves as a bridge between initial commercial discussions and the final loan documentation, capturing key commercial terms, pricing structures, and conditions. This document type is essential in the UAE market where both conventional and Islamic financing structures need to be considered, and compliance with UAE Central Bank regulations is paramount. The term sheet typically precedes the detailed loan agreement and helps all parties align on key terms before incurring significant legal costs in preparing full documentation. It includes essential information about facility terms, security requirements, financial covenants, and conditions precedent, all structured within the UAE legal framework.

What sections should be included in a Bank Loan Term Sheet?

1. Parties: Details of the Lender(s) and Borrower(s), including full legal names and registration details

2. Background: Brief context of the loan facility and its purpose

3. Definitions: Key terms used throughout the term sheet

4. Facility Type and Purpose: Description of the type of facility (term loan, revolving, etc.) and its permitted uses

5. Facility Amount: The total amount of the facility and any sub-limits

6. Currency: Currency of the facility and any provisions for multiple currencies if applicable

7. Availability Period: Period during which the facility can be drawn

8. Tenor: Duration of the facility from first drawdown

9. Interest/Profit Rate: Applicable interest rate or profit rate structure, including margin and reference rates

10. Repayment Terms: Schedule and structure of repayments

11. Security Package: Overview of required security and collateral

12. Key Financial Covenants: Essential financial ratios and covenants to be maintained

13. Conditions Precedent: Key conditions to be satisfied before facility availability

14. Fees: All applicable fees including arrangement, commitment, and processing fees

15. Governing Law: Confirmation of UAE law as governing law

What sections are optional to include in a Bank Loan Term Sheet?

1. Islamic Structure: Required for Sharia-compliant facilities, detailing the Islamic structure used (e.g., Murabaha, Ijara)

2. Syndication Provisions: Include if the facility may be syndicated to other lenders

3. Green Loan Provisions: Required for environmentally-focused projects or green financing

4. Export Credit Support: Include if export credit agency support is involved

5. Multi-currency Provisions: Required if the facility includes multiple currency options

6. Project Finance Provisions: Include for project-specific financing structures

7. Government Support: Required if government guarantees or support are involved

What schedules should be included in a Bank Loan Term Sheet?

1. Drawdown Schedule: Proposed timeline and conditions for facility drawdown

2. Repayment Schedule: Detailed breakdown of repayment dates and amounts

3. Security Assets Schedule: Detailed list of assets provided as security

4. Fee Schedule: Breakdown of all applicable fees and payment dates

5. Financial Covenants Schedule: Detailed calculations and thresholds for financial covenants

6. Conditions Precedent Checklist: Comprehensive list of required documentation and conditions

7. Know Your Customer Requirements: List of required KYC documentation as per UAE Central Bank requirements

Authors

Alex Denne

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

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate and Construction

Manufacturing and Industrial

Retail and Consumer Goods

Healthcare and Pharmaceuticals

Energy and Utilities

Technology and Telecommunications

Transportation and Logistics

Hospitality and Tourism

Education

Agriculture and Food Production

Media and Entertainment

Relevant Teams

Legal

Finance

Treasury

Corporate Banking

Risk Management

Compliance

Credit Analysis

Corporate Finance

Banking Operations

Islamic Banking

Investment

Senior Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Banking Manager

Relationship Manager

Credit Risk Manager

Legal Counsel

Compliance Officer

Financial Controller

Investment Manager

Corporate Finance Manager

Loan Officer

Chief Executive Officer

Banking Operations Manager

Risk Assessment Officer

Islamic Banking Specialist

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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