Bridge Facility Agreement for Hong Kong

Bridge Facility Agreement Template for Hong Kong

A Bridge Facility Agreement under Hong Kong law is a temporary financing arrangement that provides interim funding until a more permanent financing solution can be implemented. This document establishes the terms and conditions for a short-term loan facility, typically used in time-sensitive situations such as acquisitions, refinancing, or project financing. The agreement encompasses key provisions including facility terms, drawdown mechanics, repayment obligations, security arrangements (if applicable), and various protections for lenders, all structured in compliance with Hong Kong banking and financial regulations.

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What is a Bridge Facility Agreement?

A Bridge Facility Agreement is a crucial financing document used when companies require interim funding solutions before securing long-term financing or completing a specific transaction. This type of facility is particularly common in acquisition financing, refinancing scenarios, or when immediate funding is needed ahead of a bond issuance or equity raising. The agreement, governed by Hong Kong law, details the temporary nature of the facility, typically ranging from a few months to a year, and includes comprehensive provisions on facility amount, interest rates, repayment terms, conditions precedent, and events of default. It must comply with Hong Kong banking regulations and financial services requirements, making it essential to incorporate specific local law considerations, particularly those under the Banking Ordinance and related financial regulations.

What sections should be included in a Bridge Facility Agreement?

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

2. Background: Context of the bridge facility, including its purpose and relationship to any permanent financing

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

4. The Facility: Details of the bridge facility, including amount, purpose, and availability period

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

6. Drawdown: Procedures and requirements for utilising the facility

7. Interest: Interest rate, calculation periods, and payment provisions

8. Repayment and Prepayment: Terms for repayment, mandatory and voluntary prepayment provisions

9. Fees and Expenses: All fees payable including arrangement fees, commitment fees, and cost provisions

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

11. Representations and Warranties: Borrower's representations and warranties

12. Information Undertakings: Requirements for financial and other information to be provided

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

14. Events of Default: Circumstances constituting default and consequences

15. Changes to Parties: Transfer and assignment provisions

16. Administration: Administrative provisions including payment mechanics and notices

17. Governing Law and Enforcement: Choice of law and jurisdiction provisions

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

1. Security: Required if the facility is secured, detailing security arrangements and enforcement rights

2. Guarantee: Required if there are guarantors, containing guarantee and indemnity provisions

3. Agent and Security Agent Provisions: Required for syndicated facilities, detailing the role and powers of facility and security agents

4. Increased Costs: Optional protection for lenders against regulatory changes, often included in larger facilities

5. Market Disruption: Optional provisions dealing with market disruption events affecting interest rates

6. Clean-Down: Required if the facility includes periodic clean-down requirements

7. Accordion Feature: Optional provisions allowing for facility increase

8. Extension Options: Optional provisions for extending the facility term

What schedules should be included in a Bridge Facility Agreement?

1. Conditions Precedent: List of required conditions precedent documents

2. Form of Drawdown Request: Template for borrower to request utilisation

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

4. Repayment Schedule: If applicable, schedule of repayment dates and amounts

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

6. Form of Accession Deed: Template for additional parties to accede to the agreement

7. Form of Resignation Letter: Template for party resignation from the agreement

8. Form of Extension Request: Template for requesting extension of the facility

9. Lender Commitments: Details of commitments for syndicated facilities

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

Hong Kong

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking

Financial Services

Private Equity

Real Estate

Infrastructure

Manufacturing

Technology

Healthcare

Energy

Telecommunications

Retail

Mining

Construction

Transportation

Hospitality

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Secretarial

Credit

Operations

Banking

Deal Advisory

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Banking Lawyer

Finance Manager

Risk Manager

Compliance Officer

Company Secretary

Investment Banker

Relationship Manager

Credit Officer

Transaction Manager

Due Diligence Officer

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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