Loan Sharing Agreement for Malaysia

Loan Sharing Agreement Template for Malaysia

A comprehensive legal agreement governed by Malaysian law that establishes the terms and conditions for multiple lenders to participate in a shared loan facility. The document details the rights, obligations, and relationships between the lenders and borrower(s), including loan contribution amounts, interest arrangements, repayment terms, and security sharing. It incorporates provisions compliant with Malaysian banking regulations and can accommodate both conventional and Islamic financing structures, featuring specific clauses for inter-creditor relationships and risk-sharing mechanisms.

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What is a Loan Sharing Agreement?

The Loan Sharing Agreement is essential in syndicated lending and co-financing arrangements under Malaysian jurisdiction. It is typically used when multiple lenders wish to participate in financing a single borrower while sharing risks and rewards. The document establishes the framework for lender cooperation, specifies each party's rights and obligations, and ensures compliance with Malaysian banking regulations and contract law. The agreement includes crucial elements such as facility amounts, interest calculations, security sharing, and enforcement mechanisms. Given Malaysia's dual banking system, the Loan Sharing Agreement can be structured to accommodate both conventional and Islamic financing principles, making it versatile for various financing needs.

What sections should be included in a Loan Sharing Agreement?

1. Parties: Identifies and defines all parties to the agreement, including lenders and borrower(s)

2. Background: Explains the context and purpose of the loan sharing arrangement

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Loan Amount and Purpose: Specifies the total loan amount, each lender's contribution, and permitted use of funds

5. Interest and Fees: Details the interest rate, calculation method, and any applicable fees

6. Drawdown and Disbursement: Specifies conditions precedent and procedures for loan disbursement

7. Repayment Terms: Sets out repayment schedule, prepayment provisions, and allocation between lenders

8. Representations and Warranties: Standard declarations by borrower regarding their capacity and authority

9. Covenants: Positive and negative obligations of the borrower during the loan term

10. Events of Default: Lists circumstances constituting default and consequences

11. Inter-creditor Provisions: Governs relationship between lenders, including voting rights and payment priorities

12. Governing Law and Jurisdiction: Specifies Malaysian law as governing law and jurisdiction for disputes

What sections are optional to include in a Loan Sharing Agreement?

1. Security Arrangements: Required when loan is secured against assets or property

2. Guarantee Provisions: Include when there are third-party guarantors

3. Islamic Finance Provisions: Required when the loan must comply with Shariah principles

4. Agent Provisions: Include when a facility agent is appointed to manage the loan

5. Assignment and Transfer: Include when lenders may want to transfer their loan portions

6. Currency Provisions: Required for multi-currency loans

7. Insurance Requirements: Include when specific insurance coverage is required

What schedules should be included in a Loan Sharing Agreement?

1. Schedule 1 - Lender Commitments: Details each lender's loan commitment amount and percentage share

2. Schedule 2 - Conditions Precedent: Lists all documents and conditions required before drawdown

3. Schedule 3 - Repayment Schedule: Detailed amortization schedule if applicable

4. Schedule 4 - Form of Drawdown Notice: Standard form for requesting loan disbursement

5. Schedule 5 - Security Documents: List and copies of all security documents if applicable

6. Schedule 6 - Calculation of Interest and Fees: Detailed methodology for calculating interest and fees

7. Appendix A - Contact Details: Contact information for all parties and authorized representatives

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

Malaysia

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Islamic Finance

Real Estate

Infrastructure

Manufacturing

Energy

Construction

Technology

Healthcare

Agriculture

Transportation

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Compliance

Credit Risk

Corporate Banking

Islamic Banking

Investment Banking

Documentation

Security Administration

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Banking Lawyer

Compliance Officer

Credit Risk Manager

Relationship Manager

Treasury Manager

Islamic Finance Specialist

Loan Officer

Corporate Finance Manager

Investment Manager

Security Trustee

Facility Agent

Contract Administrator

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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