Senior Facilities Agreement Template for the United Arab Emirates

A Senior Facilities Agreement is a comprehensive legal document that governs multi-lender financing arrangements in the United Arab Emirates. You will need this agreement when structuring significant corporate loans, acquisition financing, or project financing involving multiple financial institutions. The document establishes the relationship between borrowers, lenders, and various financial intermediaries while ensuring compliance with UAE federal laws and Central Bank regulations.

When do you need this document?

You require a Senior Facilities Agreement when arranging substantial corporate financing typically exceeding AED 100 million. This includes leveraged buyouts where private equity firms acquire companies using borrowed funds, infrastructure projects requiring consortium lending arrangements, and corporate refinancing where existing debt facilities need restructuring. The agreement is essential for real estate development projects involving multiple lenders and phases of funding. You also need this document when establishing revolving credit facilities for working capital purposes or term loans for capital expenditure projects that require coordination among multiple financial institutions.

Key legal considerations

The agreement must carefully address facility structures including revolving credit facilities, term loans, and contingent facilities while defining clear drawdown procedures and repayment schedules. Security arrangements require particular attention, ensuring compliance with UAE security registration requirements and defining the roles of security agents in managing collateral. Interest rate provisions must consider UAE usury restrictions and provide for both fixed and floating rate options. Default provisions need careful drafting to address cross-default clauses, financial covenants, and acceleration rights while considering UAE court enforcement procedures. The document should include comprehensive representations, warranties, and undertakings that reflect UAE corporate law requirements and ongoing compliance obligations.

Legal requirements in United Arab Emirates

Senior Facilities Agreements must comply with UAE Civil Code provisions governing contract formation and enforceability, ensuring proper execution by authorized corporate representatives. The UAE Banking Law requires adherence to Central Bank regulations regarding lending limits, provisioning requirements, and reporting obligations for financial institutions. Commercial Transactions Law governs the commercial aspects including negotiable instruments and security interests. Corporate borrowers must demonstrate proper board authorization under UAE Commercial Companies Law, with resolutions and corporate capacity documentation. Security arrangements must comply with UAE security registration requirements, particularly for real estate and movable assets. The agreement should address Sharia compliance considerations where Islamic finance principles apply, ensuring permissible financing structures and profit-sharing arrangements rather than interest-based returns where required.