Financing Contract Agreement for Nigeria

Financing Contract Agreement Template for Nigeria

A comprehensive legal document governed by Nigerian law that establishes and regulates a financing arrangement between a lender and borrower. The agreement details the terms and conditions of the facility, including loan amount, interest rates, repayment terms, security arrangements, and obligations of all parties. It incorporates requirements from Nigerian banking regulations, particularly the Banks and Other Financial Institutions Act (BOFIA) 2020 and Central Bank of Nigeria guidelines, while ensuring compliance with local financial and corporate laws. The document includes provisions for security, events of default, representations and warranties, and dispute resolution mechanisms specific to the Nigerian jurisdiction.

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What is a Financing Contract Agreement?

The Financing Contract Agreement serves as the primary document for establishing and governing lending relationships in Nigeria's financial sector. This document is essential when any party seeks to obtain financing from a licensed financial institution or lender within Nigeria. It encompasses all necessary elements required by Nigerian banking and financial regulations, including BOFIA 2020 and CBN directives. The agreement typically includes detailed provisions on facility terms, security arrangements, conditions precedent, representations and warranties, covenants, and events of default. It's particularly crucial for ensuring compliance with local regulatory requirements while protecting both lender and borrower interests. The document can be adapted for various financing structures, from simple bilateral loans to complex syndicated facilities, and is commonly used in both corporate and project finance transactions in Nigeria.

What sections should be included in a Financing Contract Agreement?

1. Parties: Identifies and defines the parties to the agreement - typically the lender(s) and borrower(s), including their full legal names and addresses

2. Background: Sets out the context and purpose of the financing arrangement, including any relevant preliminary discussions or arrangements

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes rules for interpreting the document

4. The Facility: Details the amount, type, and purpose of the financing facility being provided

5. Conditions Precedent: Lists the conditions that must be satisfied before the facility becomes available

6. Drawdown: Specifies the mechanism and conditions for accessing the facility funds

7. Interest: Details the interest rate(s), calculation method, and payment terms

8. Repayment: Outlines the repayment schedule, amounts, and mechanisms

9. Security: Details the security/collateral arrangements securing the facility

10. Representations and Warranties: States the facts and assurances provided by the borrower

11. Covenants: Sets out the positive and negative obligations of the borrower during the facility period

12. Events of Default: Lists circumstances that constitute default and the consequences thereof

13. Fees and Expenses: Details all fees, costs, and expenses related to the facility

14. Changes to Parties: Provisions regarding assignment, transfer, or novation of rights and obligations

15. Notices: Specifies how formal communications between parties should be made

16. Governing Law and Jurisdiction: Establishes Nigerian law as governing law and specifies jurisdiction for disputes

17. Execution: Signature blocks and execution formalities

What sections are optional to include in a Financing Contract Agreement?

1. Syndication Provisions: Required when multiple lenders are involved or if syndication is contemplated

2. Islamic Finance Provisions: Required when the financing needs to comply with Islamic banking principles

3. Foreign Currency Provisions: Required when the facility involves foreign currency or international transactions

4. Insurance: Detailed insurance requirements when specific insurance coverage is required for the facility

5. Tax Provisions: Detailed tax clauses when complex tax implications exist or cross-border elements are involved

6. Force Majeure: Detailed provisions for unforeseen circumstances, particularly relevant in long-term financing

7. Anti-Money Laundering Provisions: Enhanced AML provisions for high-risk transactions or when required by regulatory requirements

8. Environmental Compliance: Required when financing projects with environmental impacts or risks

9. Security Trustee Provisions: Required when security is held by a trustee on behalf of multiple lenders

What schedules should be included in a Financing Contract Agreement?

1. Facility Details: Detailed breakdown of the facility amount, purpose, and terms

2. Conditions Precedent Documents: List of all required documents and conditions to be satisfied

3. Drawdown Request Form: Template form for requesting drawdown of the facility

4. Repayment Schedule: Detailed amortization or repayment schedule

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

6. Fee Schedule: Detailed breakdown of all applicable fees and charges

7. Financial Covenants: Detailed financial ratios and covenants to be maintained

8. Permitted Security Interests: List of security interests permitted under the agreement

9. Form of Compliance Certificate: Template for periodic compliance reporting

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

Nigeria

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate and Construction

Manufacturing

Agriculture

Oil and Gas

Technology and Telecommunications

Healthcare

Education

Transportation and Logistics

Retail and Consumer Goods

Energy and Utilities

Mining and Natural Resources

Infrastructure Development

Small and Medium Enterprises

Relevant Teams

Legal

Finance

Risk Management

Compliance

Treasury

Credit

Corporate Banking

Operations

Investment

Corporate Secretariat

Business Development

Portfolio Management

Transaction Advisory

Documentation

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Finance Manager

Credit Risk Manager

Relationship Manager

Treasury Manager

Compliance Officer

Risk Officer

Company Secretary

Investment Manager

Transaction Manager

Portfolio Manager

Banking Operations Manager

Credit Analyst

Financial Controller

Managing Director

Chief Executive Officer

Chief Risk 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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