Loan Purchase And Sale Agreement for Nigeria

Loan Purchase And Sale Agreement Template for Nigeria

This is a comprehensive legal agreement governed by Nigerian law that facilitates the transfer of loan assets from one entity to another. The document details the terms and conditions of the loan purchase, including the purchase price, representations and warranties, transfer mechanics, and completion requirements. It ensures compliance with Nigerian banking regulations, particularly the Banks and Other Financial Institutions Act (BOFIA) 2020 and Central Bank of Nigeria requirements. The agreement includes provisions for due diligence, document delivery, and post-completion obligations, while addressing specific Nigerian regulatory and compliance requirements for loan transfers.

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What is a Loan Purchase And Sale Agreement?

The Loan Purchase and Sale Agreement is a crucial document used in Nigerian financial markets when one entity wishes to transfer loan assets to another. This agreement is commonly used in scenarios such as portfolio restructuring, non-performing loan sales, or strategic asset disposals. It must comply with Nigerian banking regulations, particularly BOFIA 2020 and Central Bank of Nigeria directives. The document encompasses detailed provisions for the transfer of loan assets, including purchase price mechanisms, representations about the loan quality, transfer of security interests, and borrower notification requirements. It's essential for financial institutions managing their loan portfolios and for entities acquiring loan assets in the Nigerian market.

What sections should be included in a Loan Purchase And Sale Agreement?

1. Parties: Identification of the seller and purchaser of the loans, including their registration details and addresses

2. Background: Context of the transaction, including the existence of the loans and the seller's right to sell them

3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation

4. Sale and Purchase: Core transaction terms including the agreement to sell and purchase the loans

5. Purchase Price and Payment: Details of the purchase price, payment method, and timing

6. Completion: Process and requirements for completing the transfer of loans

7. Seller's Representations and Warranties: Warranties regarding the loans, seller's authority, and loan documentation

8. Purchaser's Representations and Warranties: Warranties regarding purchaser's authority and ability to complete the transaction

9. Transfer and Assignment: Mechanics of transferring the loans and related rights

10. Delivery of Documents: Requirements for delivery of loan documentation and timing

11. Confidentiality: Obligations regarding confidential information

12. Notices: Process for giving notices under the agreement

13. Governing Law and Jurisdiction: Nigerian law as governing law and jurisdiction for disputes

14. General Provisions: Standard boilerplate provisions including severability, amendments, and counterparts

What sections are optional to include in a Loan Purchase And Sale Agreement?

1. Security Assignment: Required when the loans are secured and security interests need to be transferred

2. Regulatory Compliance: Specific section needed when the transaction requires regulatory approvals

3. Post-Completion Obligations: Include when ongoing obligations exist after completion

4. Tax Provisions: Detailed tax provisions when specific tax implications need to be addressed

5. Servicing Arrangements: Required when the seller will continue to service the loans post-sale

6. Data Protection: Include when personal data is involved in the loan transfer

7. Force Majeure: Optional protection against unforeseen circumstances preventing performance

8. Step-In Rights: Include when purchaser needs rights to step into existing contracts

What schedules should be included in a Loan Purchase And Sale Agreement?

1. Schedule 1 - The Loans: Detailed list and description of loans being purchased, including principal amounts, interest rates, and borrower details

2. Schedule 2 - Loan Documentation: List of all loan documents being transferred

3. Schedule 3 - Form of Transfer Notices: Template notices to borrowers regarding the transfer of their loans

4. Schedule 4 - Completion Requirements: Detailed list of documents and actions required for completion

5. Schedule 5 - Security Details: Details of any security interests associated with the loans

6. Schedule 6 - Power of Attorney: Form of power of attorney for executing transfer documents

7. Appendix A - Calculation of Purchase Price: Methodology and calculations for determining the final purchase price

8. Appendix B - Due Diligence Findings: Summary of due diligence results and any identified issues

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

Sale Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking

Financial Services

Asset Management

Investment Banking

Debt Collection

Private Equity

Corporate Finance

Financial Technology

Microfinance

Relevant Teams

Legal

Finance

Risk Management

Compliance

Treasury

Credit

Portfolio Management

Corporate Finance

Due Diligence

Asset Management

Investment

Operations

Relevant Roles

Chief Financial Officer

Head of Legal

Treasury Manager

Risk Management Officer

Portfolio Manager

Credit Manager

Compliance Officer

Legal Counsel

Investment Manager

Director of Finance

Asset Manager

Transaction Manager

Due Diligence Officer

Corporate Finance Manager

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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