Debt Financing Agreement for Germany

Debt Financing Agreement Template for Germany

A comprehensive legal agreement governed by German law that establishes the terms and conditions for a debt financing arrangement between a lender and borrower. The document incorporates specific requirements under German banking regulations and civil law, including detailed provisions for loan disbursement, repayment terms, security arrangements, and enforcement mechanisms. It addresses particular aspects of German legal requirements such as form requirements under the BGB (German Civil Code) and compliance with KWG (German Banking Act) regulations, while also incorporating standard international financing practices where applicable under German law.

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What is a Debt Financing Agreement?

The Debt Financing Agreement is a crucial document used when a company or entity seeks to obtain debt financing from a bank or financial institution in Germany. It serves as the primary contract governing the lending relationship, detailing all essential aspects including loan amount, interest rates, repayment terms, security arrangements, and covenant packages. The agreement must comply with German regulatory requirements, particularly the Banking Act (KWG) and Civil Code (BGB), while also addressing practical commercial needs. This document is typically used for corporate lending, project finance, acquisition finance, or general corporate purposes, and can be adapted for both bilateral and syndicated lending arrangements. The structure reflects German law requirements regarding form, content, and enforceability, while incorporating international best practices in corporate lending.

What sections should be included in a Debt Financing Agreement?

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

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

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

4. The Facility: Details of the loan amount, purpose, and availability period

5. Conditions Precedent: Conditions that must be satisfied before drawdown

6. Drawdown Mechanics: Procedures and requirements for utilization of the facility

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

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

9. Tax Provisions: Tax-related obligations and gross-up provisions

10. Representations and Warranties: Standard confirmations given by the borrower

11. Information Undertakings: Ongoing information and reporting obligations

12. General Undertakings: Positive and negative covenants of the borrower

13. Events of Default: Circumstances constituting default and consequences

14. Changes to Parties: Rules for assignments and transfers

15. Administration: Administrative provisions, notices, calculations

16. Governing Law and Jurisdiction: Choice of German law and jurisdiction provisions

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

1. Security: Required if the loan is secured; details security arrangements and enforcement

2. Guarantees: Required if third-party guarantees are part of the credit support

3. Financial Covenants: Include for loans where financial ratios need to be maintained

4. Account Bank Provisions: Required if specific account arrangements are part of the structure

5. Syndication Provisions: Include for loans that may be syndicated

6. Intercreditor Provisions: Required when multiple creditors are involved

7. Currency Provisions: Include for multi-currency facilities

8. Increased Costs and Market Disruption: Include for longer-term or larger facilities

What schedules should be included in a Debt Financing Agreement?

1. Conditions Precedent Documents: List of required documents and conditions

2. Form of Drawdown Request: Standard form for requesting loan utilization

3. Form of Transfer Certificate: Template for transferring loan participations

4. Repayment Schedule: Detailed schedule of repayment dates and amounts

5. Security Documents: Forms of security agreements and pledges

6. Financial Covenant Calculations: Formulas and definitions for financial covenants

7. Form of Compliance Certificate: Template for periodic compliance confirmation

8. Contact Details: List of administrative details for all parties

9. Form of Accession Letter: Template for new parties joining the agreement

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

Germany

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking & Financial Services

Real Estate & Construction

Manufacturing & Industrial

Technology & Software

Energy & Utilities

Infrastructure

Healthcare

Retail & Consumer Goods

Transportation & Logistics

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Development

Credit

Operations

Transaction Management

Investment

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Banking Lawyer

Relationship Manager

Credit Officer

Risk Manager

Compliance Officer

Corporate Finance Manager

Financial Controller

Investment Manager

Transaction Manager

Debt Finance Associate

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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