Credit Agreement Contract for United Arab Emirates

Credit Agreement Contract Template for United Arab Emirates

A Credit Agreement Contract governed by UAE law is a legally binding document that establishes the terms and conditions under which a lender provides financial facilities to a borrower. The agreement is structured in accordance with UAE Federal Laws, particularly UAE Federal Law No. 14 of 2018 (UAE Central Bank Law) and relevant commercial legislation. It details the credit facility terms, including amount, interest rates, repayment schedules, security arrangements, and various covenants and undertakings. The document incorporates specific UAE regulatory requirements and can be structured to be either conventional or Sharia-compliant, depending on the parties' requirements.

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What is a Credit Agreement Contract?

The Credit Agreement Contract is a fundamental document in UAE banking and finance transactions, used when a lender extends credit facilities to a borrower. It must comply with UAE Federal Law No. 14 of 2018 and other relevant banking regulations, while potentially incorporating Sharia-compliance features if required. The agreement typically covers facility amount, purpose, interest/profit rates, repayment terms, security arrangements, representations and warranties, covenants, and events of default. It's essential for both conventional and Islamic banking transactions in the UAE, providing a comprehensive framework for the credit relationship between parties. The document can be adapted for various facility types including term loans, revolving facilities, or syndicated arrangements, and may include multiple currency options. The agreement's structure ensures protection for the lender while providing clear operational guidelines for the borrower.

What sections should be included in a Credit Agreement Contract?

1. Parties: Identification of the lender and borrower with full legal names and addresses

2. Background: Context of the credit facility, purpose of the loan, and brief description of the arrangement

3. Definitions: Detailed definitions of terms used throughout the agreement

4. Facility Details: Specific details of the credit facility including amount, purpose, and type of facility

5. Interest and Fees: Interest rate(s), calculation method, fees, charges, and payment terms

6. Drawdown: Conditions and procedures for drawing down the facility

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

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

9. Covenants: Positive and negative obligations of the borrower during the facility period

10. Events of Default: Circumstances constituting default and consequences thereof

11. Security: Details of any security or guarantees provided for the facility

12. Conditions Precedent: Conditions that must be satisfied before the facility becomes available

13. Boilerplate Clauses: Standard legal provisions including notices, amendments, governing law, etc.

What sections are optional to include in a Credit Agreement Contract?

1. Islamic Finance Provisions: Required when the facility needs to be Sharia-compliant, including specific structuring and terminology

2. Syndication Provisions: Required for syndicated facilities involving multiple lenders

3. Currency Provisions: Required for multi-currency facilities or cross-border transactions

4. Tax Provisions: Detailed tax clauses required for cross-border facilities or specific tax structures

5. Assignment and Transfer: Required when the facility may be transferred or syndicated in the future

6. Agency Provisions: Required for facilities involving an agent bank or security agent

7. Account Bank Provisions: Required when specific account arrangements are needed

8. Insurance Requirements: Detailed insurance provisions required for secured facilities

What schedules should be included in a Credit Agreement Contract?

1. Facility Summary: Detailed breakdown of facility amounts, pricing, and key terms

2. Conditions Precedent Documents: List of required documents and conditions to be satisfied

3. Form of Drawdown Notice: Template for borrower to request drawdown of the facility

4. Repayment Schedule: Detailed amortization schedule if applicable

5. Security Documents: Forms of security documents and guarantees

6. Financial Covenants: Detailed financial ratios and calculations

7. Form of Compliance Certificate: Template for periodic compliance reporting

8. Permitted Security: List of security interests permitted under the agreement

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
Relevant Industries

Banking & Financial Services

Real Estate & Construction

Manufacturing & Industrial

Energy & Utilities

Healthcare

Technology & Telecommunications

Retail & Consumer

Transport & Logistics

Hospitality & Tourism

Education

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit Administration

Company Secretariat

Executive Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Compliance Officer

Credit Risk Manager

Relationship Manager

Corporate Banking Manager

Finance Manager

Company Secretary

Managing Director

CEO

Head of Legal

Head of Credit

Risk 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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