Debt Promissory Note for Germany

Debt Promissory Note Template for Germany

A German law Debt Promissory Note (Schuldschein) is a bilateral loan agreement instrument that combines elements of both a loan agreement and a negotiable debt instrument. It represents a private placement debt instrument widely used in German financial markets, offering a streamlined alternative to traditional syndicated loans or bonds. The document evidences a debt obligation and typically includes key terms such as principal amount, interest rate, maturity, and payment provisions, while maintaining relatively simple documentation requirements compared to other financing instruments. Under German law, it must meet specific form requirements to be valid and enforceable.

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What is a Debt Promissory Note?

The Debt Promissory Note (Schuldschein) is a traditional German debt instrument that serves as a hybrid between a traditional loan and a bond. It is commonly used when a borrower seeks medium to long-term financing without the complexity and regulatory requirements of a bond issuance or syndicated loan. The document typically contains the core terms of the debt obligation, including amount, interest, maturity, and payment terms, while adhering to German law requirements for form and content. Schuldschein notes are particularly attractive to mid-sized and large corporations, financial institutions, and public sector entities seeking flexible financing options. The instrument can be structured as transferable or non-transferable, making it adaptable to various financing needs while maintaining relatively straightforward documentation.

What sections should be included in a Debt Promissory Note?

1. Parties: Identification of the borrower (Schuldner) and lender (Gläubiger) with full legal names and addresses

2. Background: Brief context of the debt obligation and purpose of the promissory note

3. Definitions: Key terms used in the document, including Banking Day, Payment Date, and other relevant definitions

4. Principal Amount: Clear statement of the loan amount in numbers and words

5. Interest Rate: Specification of the interest rate, calculation method, and payment dates

6. Term and Repayment: Duration of the loan and repayment terms including final maturity date

7. Payment Provisions: Details of payment method, account information, and payment mechanics

8. Representations: Basic representations of the borrower regarding capacity and authority

9. Form Requirements: Statement confirming compliance with written form requirements under German law

10. Governing Law: Confirmation of German law as governing law and jurisdiction

What sections are optional to include in a Debt Promissory Note?

1. Transferability Provisions: Required if the note is intended to be transferable, including assignment mechanics and restrictions

2. Tax Gross-up: Include if tax gross-up provisions are required for cross-border transactions

3. Multiple Lenders: Required if there are multiple lenders, including provisions for lender representation

4. Security: Include if the note is secured by any collateral or guarantees

5. Default Interest: Optional provisions for interest rate increases upon default events

6. Early Repayment: Include if early repayment options are to be permitted

7. Notices: Detailed notice provisions if complex communication requirements exist

What schedules should be included in a Debt Promissory Note?

1. Repayment Schedule: If installment payments are required, detailed schedule of payment dates and amounts

2. Form of Transfer Certificate: Required if the note is transferable, template for documenting transfers

3. Lender Schedule: Required for multiple lenders, listing all lenders and their commitment amounts

4. Account Details: Separate schedule for detailed payment account information and payment mechanics

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

Promissory Note

Sector

Banking

Cost

Free to use
Relevant Industries

Banking

Financial Services

Manufacturing

Real Estate

Infrastructure

Energy

Healthcare

Technology

Telecommunications

Public Sector

Construction

Transportation

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Finance

Debt Capital Markets

Portfolio Management

Transaction Management

Deal Advisory

Relevant Roles

Chief Financial Officer

Treasury Manager

Finance Director

Legal Counsel

Corporate Lawyer

Debt Capital Markets Manager

Credit Risk Manager

Investment Manager

Portfolio Manager

Relationship Manager

Loan Officer

Compliance Officer

Financial Controller

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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