Debt Facility Agreement Template for Indonesia

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Key Requirements PROMPT example:

Debt Facility Agreement

"Need a Debt Facility Agreement for a USD 50 million syndicated loan to an Indonesian manufacturing company, with multiple drawdown options and quarterly repayment schedule starting March 2025; must include Islamic finance provisions."

Document background
The Debt Facility Agreement serves as the primary documentation for lending arrangements in Indonesia, establishing the legal framework for financial institutions to provide credit facilities to corporate borrowers. This document is essential when a company seeks to obtain debt financing, whether for working capital, capital expenditure, acquisition financing, or other corporate purposes. The agreement must comply with Indonesian banking regulations, including OJK requirements and Bank Indonesia regulations, particularly regarding foreign currency transactions and mandatory use of Rupiah for domestic transactions. It includes comprehensive provisions covering facility terms, security arrangements, conditions for drawdown, repayment obligations, and events of default, while incorporating specific Indonesian law requirements such as execution in Bahasa Indonesia for enforceability.
Suggested Sections

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

2. Background: Context of the facility and purpose of the loan

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

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

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

6. Drawdown: Process and requirements for utilization of the facility

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

8. Repayment: Terms of repayment including schedule, prepayment, and mandatory prepayment

9. Representations and Warranties: Statements of fact and assurances given by the borrower

10. Covenants: Positive and negative undertakings of the borrower

11. Events of Default: Circumstances constituting default and consequences

12. Security: Overview of security arrangements for the facility

13. Changes to Parties: Provisions regarding assignment and transfer rights

14. Administration: Administrative provisions including notices and calculations

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

Optional Sections

1. Syndication Provisions: Required for syndicated facilities with multiple lenders, covering voting rights and agent's role

2. Currency Provisions: Required for facilities in foreign currency or with multiple currency options

3. Islamic Finance Provisions: Required when the facility needs to comply with Sharia principles

4. Tax Gross-Up: Required when tax implications need specific treatment

5. Increased Costs: Required when regulatory changes might affect the lender's costs

6. Market Disruption: Required for facilities with floating rates to address market disruption scenarios

7. Regulatory Compliance: Required when specific OJK or BI regulations need detailed compliance provisions

8. Multi-borrower Provisions: Required when there are multiple borrowers under the facility

Suggested Schedules

1. Form of Drawdown Request: Template for borrower to request utilization of the facility

2. Conditions Precedent Documents: Detailed list of required documents and conditions

3. Repayment Schedule: Detailed amortization schedule if applicable

4. Form of Transfer Certificate: Template for transferring participation in the facility

5. Security Documents: List and copies of all security documents

6. Financial Covenants: Detailed financial ratios and calculations

7. Authorized Signatories: List of persons authorized to act for each party

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

9. Fee Schedule: Detailed breakdown of all applicable fees

10. Corporate Structure: Organization chart of borrower group if relevant

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

Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate and Property Development

Manufacturing

Infrastructure and Construction

Energy and Resources

Technology and Telecommunications

Agriculture and Plantation

Healthcare

Retail and Consumer Goods

Transportation and Logistics

Mining

Hospitality and Tourism

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Secretariat

Credit Administration

Corporate Finance

Operations

Board of Directors

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Secretary

Risk Manager

Compliance Officer

Banking Relationship Manager

Credit Officer

Finance Manager

Commercial Director

Chief Executive Officer

Corporate Finance Manager

Investment Manager

Account Manager

Loan Officer

Industries
Indonesian Civil Code (KUHPerdata): The fundamental law governing contracts and agreements in Indonesia, including provisions on formation of contracts, rights and obligations of parties, and contract enforcement
Law No. 7 of 1992 as amended by Law No. 10 of 1998 on Banking: Primary banking law that regulates lending activities and banking operations in Indonesia
Law No. 24 of 1999 on Foreign Exchange Flow and Exchange Rate System: Regulates foreign exchange transactions and currency matters relevant for cross-border lending
Bank Indonesia Regulation No. 16/21/PBI/2014: Regulation on implementation of prudential principles in managing offshore borrowing for non-bank corporations
Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment: Governs bankruptcy proceedings and debt restructuring, crucial for enforcement and default scenarios
Law No. 42 of 1999 on Fiduciary Security: Regulates security interests over movable assets, which may be relevant for collateral arrangements
Law No. 4 of 1996 on Land Mortgage: Governs security interests over land and buildings, important if real estate is used as collateral
Law No. 25 of 2007 on Investment: Relevant for foreign lenders and cross-border financing arrangements
Bank Indonesia Regulation on Mandatory Use of Rupiah: Regulations requiring the use of Indonesian Rupiah for transactions within Indonesia
OJK Regulation No. 31/POJK.05/2014: Financial Services Authority regulation on financing arrangements and governance requirements
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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