Revolving Facility Agreement for Hong Kong

Revolving Facility Agreement Template for Hong Kong

This document is a Hong Kong law-governed Revolving Facility Agreement that establishes a flexible borrowing arrangement allowing a borrower to draw down, repay, and reborrow funds up to a specified limit during the facility period. It incorporates Hong Kong banking regulations and financial services requirements, including provisions compliant with the Hong Kong Banking Ordinance and Companies Ordinance. The agreement details the facility terms, conditions precedent, utilization mechanics, interest calculations, and includes specific provisions for Hong Kong market practices and regulatory requirements.

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What is a Revolving Facility Agreement?

The Revolving Facility Agreement is a fundamental financing document used when a borrower requires flexible access to funding for working capital or general corporate purposes. This agreement, governed by Hong Kong law, enables borrowers to draw down funds multiple times up to an agreed limit, with the ability to repay and reborrow during the facility period. It is particularly relevant in Hong Kong's dynamic business environment, where companies often need adaptable financing solutions. The document includes comprehensive provisions covering facility terms, security arrangements (if applicable), conditions for utilization, interest calculations, and compliance with Hong Kong regulatory requirements. It is commonly used by both Hong Kong-based companies and international corporations operating through Hong Kong, incorporating local market practices and regulatory considerations.

What sections should be included in a Revolving Facility Agreement?

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

2. Background: Brief description of the transaction and its purpose

3. Definitions and Interpretation: Defined terms, interpretation principles, and currency/time references

4. The Facility: Core terms of the revolving facility including amount, purpose, and revolving mechanics

5. Conditions Precedent: Initial conditions and conditions for each utilization

6. Utilization: Process and requirements for drawing down the facility

7. Repayment and Prepayment: Terms for repayment, prepayment obligations and voluntary prepayment rights

8. Interest: Interest calculation, periods, payment, and default interest provisions

9. Fees: Commitment fees, arrangement fees, and other applicable fees

10. Tax Gross Up and Indemnities: Tax provisions including gross-up obligations and tax indemnities

11. Increased Costs: Provisions for dealing with regulatory or circumstantial changes affecting lenders' costs

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

13. Information Undertakings: Financial and other information to be provided by the borrower

14. Financial Covenants: Financial ratios and other financial requirements

15. General Undertakings: Positive and negative undertakings of the borrower

16. Events of Default: Events triggering default and acceleration rights

17. Changes to Parties: Transfer and assignment provisions

18. Administration: Payment mechanics, notices, calculations

19. Governing Law and Enforcement: Choice of Hong Kong law and enforcement provisions

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

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

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

3. Multiple Currencies: Required for multi-currency facilities, including currency conversion and optional currency provisions

4. Accordion Feature: Optional section allowing for facility amount increase under specified conditions

5. Green Loan Provisions: Required for green loans, including use of proceeds and reporting requirements

6. Majority Lenders: Required for syndicated facilities, defining voting rights and decision-making process

7. Bank Products: Optional section for associated banking products like hedging or cash management

8. HIBOR/HONIA Replacement: Provisions for benchmark replacement, particularly relevant given global interest rate reforms

What schedules should be included in a Revolving Facility Agreement?

1. Conditions Precedent: Detailed list of required documents and conditions

2. Form of Utilization Request: Standard form for drawing down the facility

3. Form of Transfer Certificate: Standard form for transfers between lenders

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

5. Existing Security: List of permitted existing security (if applicable)

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

7. Fee Schedule: Detailed breakdown of all applicable fees

8. Form of Commitment Notice: Template for commitment increase/reduction notices

9. List of Material Subsidiaries: Definition and current list of material subsidiaries

10. Forms of Interest Election: Templates for selecting interest periods and rates

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

Letter of Credit

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking & Financial Services

Real Estate

Manufacturing

Retail

Technology

Healthcare

Infrastructure

Energy

Telecommunications

Trading & Commerce

Logistics

Hospitality

Relevant Teams

Legal

Finance

Treasury

Corporate Banking

Risk Management

Compliance

Credit

Corporate Secretarial

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Lawyer

Legal Counsel

Company Secretary

Financial Controller

Credit Manager

Relationship Manager

Risk Manager

Compliance Officer

Banking Officer

Finance Manager

Corporate Banking Director

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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