Loan Agreement Term Sheet for Switzerland

Loan Agreement Term Sheet Template for Switzerland

This document serves as a preliminary agreement outlining the key commercial and legal terms of a proposed loan facility under Swiss law. It captures the essential elements of the lending arrangement, including facility amount, interest terms, repayment structure, security requirements, and key covenants, while providing a framework for the subsequent detailed loan documentation. The term sheet, governed by Swiss law, particularly the Swiss Code of Obligations, sets out the fundamental understanding between the lender and borrower, forming the basis for the preparation of the final loan agreement and related security documents.

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What is a Loan Agreement Term Sheet?

The Loan Agreement Term Sheet is a crucial preliminary document used in commercial lending transactions under Swiss law. It is typically prepared after initial discussions between the lender and borrower but before the drafting of full loan documentation. This document captures the material commercial terms and conditions of the proposed loan facility, including amount, pricing, tenor, security package, and key undertakings. While not all provisions of a term sheet are necessarily binding, certain terms such as confidentiality and exclusivity provisions often are. The document serves as a roadmap for legal counsel to prepare the detailed loan documentation and helps ensure all parties have a clear understanding of the transaction structure. Under Swiss law, particularly considering the Swiss Code of Obligations' requirements, the term sheet needs to be precise enough to demonstrate the parties' meeting of minds on essential terms while maintaining flexibility for detailed documentation.

What sections should be included in a Loan Agreement Term Sheet?

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

2. Background: Brief context of the loan transaction and relationship between the parties

3. Definitions: Key terms used throughout the term sheet

4. Facility Amount: The principal amount of the loan and currency

5. Purpose: Intended use of the loan proceeds

6. Interest Rate: Interest rate structure, including base rate and margin

7. Term and Repayment: Duration of the loan and repayment schedule

8. Drawdown: Conditions and mechanics for drawing the loan

9. Security: Overview of any security or collateral required

10. Key Covenants: Essential financial and operational covenants

11. Events of Default: List of key events triggering default

12. Governing Law: Confirmation of Swiss law governance

13. Binding Nature: Statement on which terms are legally binding

What sections are optional to include in a Loan Agreement Term Sheet?

1. Syndication Provisions: Required for syndicated loans, covering participation and transfer mechanics

2. Guarantees: Include when third-party guarantees are part of the security package

3. Intercreditor Provisions: Required when multiple lenders or debt types are involved

4. Tax Considerations: Include for cross-border loans or when specific tax structures are relevant

5. Foreign Exchange Provisions: Required for loans involving multiple currencies

6. Insurance Requirements: Include when specific insurance coverage is required for the loan

7. Regulatory Approvals: Include when the loan requires specific regulatory clearances

What schedules should be included in a Loan Agreement Term Sheet?

1. Repayment Schedule: Detailed amortization table or repayment dates

2. Form of Drawdown Notice: Template for borrower to request loan disbursement

3. Security Assets Schedule: Detailed list of assets provided as security

4. Conditions Precedent: Detailed list of required documents and conditions for closing

5. Fees Schedule: Breakdown of all applicable fees and charges

6. Financial Covenants Calculations: Detailed methodology for calculating financial covenants

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

Switzerland

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Relevant Industries

Banking & Financial Services

Corporate Lending

Investment Banking

Private Equity

Real Estate

Infrastructure

Manufacturing

Retail

Healthcare

Technology

Energy

Agriculture

Hospitality

Transportation

Construction

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Banking

Credit Analysis

Investment Banking

Operations

Business Development

Corporate Secretariat

Relevant Roles

Chief Financial Officer

Treasury Manager

Finance Director

Corporate Lawyer

Legal Counsel

Relationship Manager

Credit Officer

Risk Manager

Investment Banker

Corporate Banking Manager

Loan Officer

Transaction Manager

Compliance Officer

Financial Controller

Business Development 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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