Debt Financing Agreement for United Arab Emirates

Debt Financing Agreement Template for United Arab Emirates

A comprehensive legal document governed by UAE law that establishes the terms and conditions for a debt financing arrangement between a lender and borrower. The agreement complies with UAE Federal Laws, including the Civil Code and Commercial Code, and may incorporate Islamic finance principles where applicable. It details loan amount, interest rates, repayment terms, security arrangements, representations and warranties, covenants, and events of default, all within the UAE regulatory framework and Central Bank guidelines.

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What is a Debt Financing Agreement?

The Debt Financing Agreement is a crucial document used in the UAE financial market when a party seeks to obtain debt financing from a bank or financial institution. It serves as the primary contract governing the lending relationship, incorporating all UAE legal requirements and regulatory compliance measures. The document is essential for businesses seeking capital for expansion, project financing, or working capital needs. It must comply with UAE Federal Laws, including Civil and Commercial Codes, Central Bank regulations, and potentially Islamic finance principles. The agreement typically includes detailed provisions on facility terms, security arrangements, covenants, and enforcement mechanisms, all structured within the UAE legal framework.

What sections should be included in a Debt Financing Agreement?

1. Parties: Identification of the lender(s) and borrower(s), including full legal names, registration details, and addresses

2. Background: Context of the financing arrangement, purpose of the facility, and any relevant historical information

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

4. The Facility: Detailed description of the loan facility, including amount, purpose, and availability period

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

6. Drawdown Mechanics: Procedures and requirements for drawing down the facility

7. Interest and Fees: Interest calculation methodology, payment dates, default interest, and applicable fees

8. Repayment Terms: Repayment schedule, prepayment provisions, and mandatory prepayment events

9. Representations and Warranties: Standard and transaction-specific representations and warranties from the borrower

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

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

12. Security: Details of security/collateral provided for the facility

13. Changes to Parties: Assignment and transfer provisions

14. Administration: Administrative provisions including calculations, notices, and amendments

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

What sections are optional to include in a Debt Financing Agreement?

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

2. Syndication Provisions: Required for syndicated facilities, including agency provisions and inter-creditor arrangements

3. Tax Provisions: Detailed tax provisions required when cross-border elements exist or specific tax considerations apply

4. Currency Provisions: Required when the facility involves multiple currencies or currency conversion

5. Security Trustee Provisions: Required when security is held by a security trustee on behalf of multiple lenders

6. Regulatory Compliance: Specific provisions required for regulated borrowers or specific industry requirements

7. Force Majeure: Detailed force majeure provisions when required by specific industry or circumstances

What schedules should be included in a Debt Financing Agreement?

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

2. Schedule 2 - Form of Drawdown Request: Template for drawdown requests

3. Schedule 3 - Repayment Schedule: Detailed amortization schedule if applicable

4. Schedule 4 - Form of Compliance Certificate: Template for periodic compliance certification

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

6. Schedule 6 - Financial Covenants: Detailed financial covenants and calculation methodologies

7. Appendix A - Form of Transfer Certificate: Template for transfer of facility participation

8. Appendix B - Form of Security Documents: Templates for various security documents

9. Appendix C - Fee Schedule: Detailed breakdown of all applicable fees

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

Financing Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate and Construction

Manufacturing

Energy and Utilities

Healthcare

Technology

Retail and Consumer Goods

Transportation and Logistics

Hospitality and Tourism

Infrastructure Development

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit

Operations

Corporate Secretariat

Executive Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Compliance Officer

Risk Manager

Credit Manager

Investment Manager

Corporate Banking Officer

Financial Controller

Chief Executive Officer

Company Secretary

Banking Relationship 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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