Facilities Agreement for Indonesia

Facilities Agreement Template for Indonesia

A comprehensive financing document governed by Indonesian law that establishes the terms and conditions for providing credit facilities between lenders and borrowers. The agreement incorporates specific requirements under Indonesian banking regulations, including Bank Indonesia and OJK (Financial Services Authority) requirements, and addresses security creation, registration, and enforcement under Indonesian law. It covers crucial elements such as facility terms, drawdown mechanics, repayment provisions, security arrangements, representations and warranties, covenants, and events of default, all structured to comply with Indonesian regulatory framework while following international banking practices.

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What is a Facilities Agreement?

A Facilities Agreement under Indonesian law is the primary document used to establish credit relationships between lenders and borrowers in Indonesia. It is essential for various financing arrangements, from corporate lending to project finance, and must comply with specific requirements set by Bank Indonesia and the Financial Services Authority (OJK). The agreement typically includes detailed provisions on facility amounts, interest calculations, security arrangements, and regulatory compliance requirements. It is particularly important to note that Indonesian Facilities Agreements must address local security perfection requirements, mandatory use of Bahasa Indonesia in certain circumstances, and specific banking regulations regarding offshore lending. The document serves as the foundation for both domestic and cross-border financing transactions while ensuring compliance with Indonesian mandatory provisions.

What sections should be included in a Facilities Agreement?

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

2. Background: Context of the facility, purpose, and basic commercial terms agreed

3. Definitions and Interpretation: Definitions of terms used and rules of interpretation, including currency and time references

4. The Facilities: Detailed description of each facility type, amounts, and purpose

5. Conditions Precedent: Documents and conditions required before utilization

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

7. Repayment: Terms and schedule for repayment of the facilities

8. Prepayment and Cancellation: Voluntary and mandatory prepayment provisions

9. Interest: Interest calculation, periods, and payment provisions

10. Fees: All fees payable under the facility

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

12. Increased Costs: Provisions for dealing with changes in costs due to regulatory changes

13. Representations: Borrower's representations and warranties

14. Information Undertakings: Borrower's obligations to provide information

15. Financial Covenants: Financial ratios and tests to be maintained

16. General Undertakings: Borrower's general positive and negative covenants

17. Events of Default: Circumstances constituting default and consequences

18. Changes to Parties: Transfer and assignment provisions

19. Administration: Administrative provisions including calculations and notices

20. Governing Law and Enforcement: Choice of Indonesian law and enforcement provisions

What sections are optional to include in a Facilities Agreement?

1. Security: Required if the facility is secured - details of security package and enforcement

2. Guarantee: Required if there are guarantors - terms of guarantee and indemnity

3. Subordination: Required for complex corporate structures - ranking and priority of debt

4. Agent and Security Agent Provisions: Required for syndicated facilities - roles and responsibilities of agents

5. Shariah Compliance: Required for Islamic facilities - specific provisions ensuring Shariah compliance

6. Multi-currency Provisions: Required for multi-currency facilities - currency conversion and availability

7. Bank Indonesia Reporting: Required for offshore lenders - specific reporting requirements

8. Common Terms: Required for multiple facility agreements - terms applying across all facilities

What schedules should be included in a Facilities Agreement?

1. Conditions Precedent: List of required documents and conditions

2. Form of Utilization Request: Standard form for requesting drawdown

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

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

5. Repayment Schedule: Detailed amortization schedule if applicable

6. Financial Covenants Calculations: Detailed methodology for financial covenant calculations

7. Security Documents: Forms of security documents required under Indonesian law

8. Existing Security and Financial Indebtedness: List of permitted security and debt

9. Form of Bank Indonesia Reports: Templates for mandatory regulatory reporting

10. Contact Details: Administrative and notice details for all parties

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

Jurisdiction

Indonesia

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use

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