Tranche Loan Agreement for United Arab Emirates

Tranche Loan Agreement Template for United Arab Emirates

A comprehensive financing agreement governed by UAE law that establishes a multi-tranche loan facility between financial institutions and borrowers. The agreement details the terms and conditions for multiple loan tranches, which can be drawn down at different times under specific conditions. It incorporates UAE-specific legal requirements, including Central Bank regulations and potentially Islamic finance principles, while addressing local security and enforcement mechanisms. The document covers drawdown conditions, repayment terms, security arrangements, covenants, and events of default, all structured to comply with UAE commercial and banking laws.

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What is a Tranche Loan Agreement?

The Tranche Loan Agreement is a sophisticated financing instrument used in the UAE when borrowers require structured, phased funding arrangements. It is particularly relevant for large-scale projects, real estate developments, or corporate expansions where funding needs are staged over time. The agreement must comply with UAE Federal Law No. 18 of 1993 (Commercial Code) and UAE Federal Law No. 14 of 2018 (Central Bank Law), among other regulations. The document typically includes detailed provisions for multiple loan tranches, each with specific drawdown conditions, interest rates (or profit rates for Islamic facilities), and repayment terms. It's commonly used in project finance, real estate development, and corporate financing transactions where the borrower needs flexibility in accessing funds over time while providing lenders with adequate security and control mechanisms.

What sections should be included in a Tranche Loan Agreement?

1. Parties: Identification of the lender(s), borrower(s), and any guarantors or security providers

2. Background: Context of the loan facility, purpose, and basic structure of the tranches

3. Definitions and Interpretation: Definitions of terms used throughout the agreement and interpretation rules

4. The Facilities: Detailed description of each tranche, commitments, and purpose

5. Conditions Precedent: Conditions that must be satisfied before initial and subsequent utilization of each tranche

6. Utilization: Process and requirements for drawing down each tranche

7. Repayment: Repayment terms for each tranche, including scheduled repayments

8. Prepayment and Cancellation: Voluntary and mandatory prepayment provisions, cancellation terms

9. Interest: Interest calculation, periods, payment dates, and default interest

10. Fees: Commitment fees, arrangement fees, and other applicable fees

11. Tax Gross Up and Indemnities: Tax provisions and related indemnities

12. Increased Costs: Provisions for dealing with changes in costs due to regulatory changes

13. Representations: Borrower's representations and warranties

14. Information Undertakings: Borrower's obligations to provide financial and other information

15. Financial Covenants: Financial ratios and other financial requirements

16. General Undertakings: General positive and negative covenants

17. Events of Default: Circumstances constituting default and consequences

18. Changes to Parties: Transfer and assignment provisions

19. Administration: Administrative provisions, calculations, and notices

20. Governing Law and Enforcement: Choice of UAE law and enforcement provisions

What sections are optional to include in a Tranche Loan Agreement?

1. Islamic Finance Provisions: Required if any tranche is Sharia-compliant, including specific Islamic structure and principles

2. Security: Include if the loan is secured, detailing security package and enforcement

3. Guarantee: Required if there are guarantors, including guarantee terms and limitations

4. Intercreditor Provisions: Include if multiple lenders or creditor classes are involved

5. Agent and Security Agent Provisions: Required for syndicated facilities with an agent structure

6. Currency Provisions: Include if multiple currencies are involved in different tranches

7. Hedging Obligations: Required if hedging is mandatory or part of the facility

8. Accordion Facility: Optional section for future increase in facility amount

9. Local Law Security Trust: Required for UAE security arrangements involving multiple lenders

What schedules should be included in a Tranche Loan Agreement?

1. Conditions Precedent: Detailed list of required documents and conditions

2. Form of Utilization Request: Standard form for requesting drawdown of tranches

3. Form of Transfer Certificate: Template for transfer of commitments between lenders

4. Repayment Schedule: Detailed repayment schedule for each tranche

5. Form of Compliance Certificate: Template for periodic compliance certification

6. Commitment Schedule: Details of commitments for each tranche and lender

7. Form of Accession Deed: Template for new parties joining the agreement

8. Financial Covenants Calculations: Detailed calculations for financial covenants

9. Security Documents: List and copies of all security documents

10. Existing Security and Financial Indebtedness: Schedule of permitted existing arrangements

11. Form of Quarterly Financial Report: Template for required financial reporting

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 & Financial Services

Real Estate & Construction

Infrastructure Development

Energy & Utilities

Healthcare

Hospitality & Tourism

Manufacturing & Industrial

Technology & Telecommunications

Transport & Logistics

Retail & Commercial Development

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Finance

Operations

Credit

Project Management

Investment

Company Secretariat

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Compliance Officer

Project Finance Manager

Corporate Finance Manager

Risk Manager

Banking Relationship Manager

Financial Controller

Credit Risk Officer

Investment Manager

Company Secretary

Senior Finance Manager

Operations Director

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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