Credit Facility Agreement for Australia

Credit Facility Agreement Template for Australia

A comprehensive legal agreement governed by Australian law that establishes the terms and conditions under which a lender provides credit facilities to a borrower. The document details the facility amount, purpose, drawdown mechanics, interest calculations, repayment terms, security arrangements, and ongoing obligations of all parties. It incorporates requirements under Australian financial services legislation, including the National Consumer Credit Protection Act 2009 and the Australian Securities and Investments Commission Act 2001, while establishing clear rights, obligations, and remedies for all parties involved in the credit arrangement.

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What is a Credit Facility Agreement?

The Credit Facility Agreement is a fundamental financing document used in Australian business transactions when a lender agrees to provide credit facilities to a borrower. It is commonly used for various purposes including working capital financing, acquisition financing, project financing, or asset purchases. The agreement must comply with Australian financial services laws and regulations, including the National Consumer Credit Protection Act 2009 and related legislation. It typically includes detailed provisions on facility limits, drawdown mechanisms, interest calculations, security arrangements, representations and warranties, covenants, and events of default. The document is essential for both regulated financial institutions and alternative lenders operating in Australia, providing a legally robust framework for credit arrangements while protecting the interests of all parties involved.

What sections should be included in a Credit Facility Agreement?

1. Parties: Identification of the lender(s) and borrower(s), including their legal names, ACN/ABN, and addresses

2. Background: Context of the facility arrangement and purpose of the loan

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

4. The Facility: Core terms of the credit facility including type, purpose, and amount

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

6. Drawdown: Mechanics and procedures for requesting and making drawdowns under the facility

7. Interest: Interest rate provisions, calculation methods, and payment terms

8. Repayment and Prepayment: Terms for scheduled repayments and voluntary/mandatory prepayments

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

10. Undertakings: Positive and negative obligations of the borrower during the facility term

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

12. Security: Details of security arrangements securing the facility

13. Costs and Expenses: Allocation of transaction costs and ongoing expenses

14. Changes to Parties: Rules regarding assignment and transfer of rights and obligations

15. Notices: Communication requirements and contact details

16. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and execution requirements

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

1. Accordion Facility: Optional section for when the facility includes the ability to increase the facility limit under specified conditions

2. Multiple Facilities: Required when the agreement covers multiple types of facilities (term loan, revolving facility, etc.)

3. Syndication Provisions: Required for syndicated facilities, including agency and majority lender provisions

4. Market Disruption: Provisions dealing with circumstances where interest rate benchmarks become unavailable

5. Guarantee: Required when there are guarantors supporting the borrower's obligations

6. Special Purpose Vehicle Provisions: Required when the borrower is an SPV, including specific covenants and restrictions

7. Cross-Default: Optional provisions linking defaults under other facilities or agreements

8. Review Events: Optional triggers for facility review that are not events of default

What schedules should be included in a Credit Facility Agreement?

1. Facility Particulars: Detailed terms of each facility including limits, interest rates, and maturity dates

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

3. Drawdown Notice: Form of notice for requesting drawdowns under the facility

4. Calculation of Interest and Fees: Detailed methodology for calculating interest and other amounts

5. Security Documents: List and copies of security documents

6. Compliance Certificate: Form of certificate for periodic compliance reporting

7. Financial Covenants: Detailed financial covenant calculations and reporting requirements

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

9. Group Structure: Corporate structure diagram of the borrower group

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

Jurisdiction

Australia

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate and Property

Infrastructure

Manufacturing

Mining and Resources

Retail

Healthcare

Technology

Agriculture

Construction

Transport and Logistics

Energy and Utilities

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Banking

Risk Management

Operations

Company Secretariat

Corporate Finance

Deal Advisory

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Lawyer

Legal Counsel

Credit Manager

Risk Manager

Relationship Manager

Compliance Officer

Financial Controller

Banking Executive

Credit Analyst

Corporate Banking Manager

Finance Manager

Managing Director

Company Secretary

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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