Senior Loan Agreement Template for Nigeria

A comprehensive financing agreement governed by Nigerian law that establishes the terms and conditions for a senior secured loan facility. The agreement incorporates key provisions required under Nigerian banking regulations, including BOFIA 2020 and CBN guidelines, and sets out detailed terms for lending, security, covenants, and enforcement. It includes provisions for drawdown mechanics, interest calculations, repayment terms, borrower undertakings, and events of default, all structured to ensure compliance with Nigerian legal requirements and banking practices.

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What is a Senior Loan Agreement?

The Senior Loan Agreement is a fundamental financing document used in Nigerian corporate lending transactions where a lender provides senior secured debt financing to a borrower. This agreement is particularly important in the Nigerian context as it must comply with specific local banking regulations, including the Banks and Other Financial Institutions Act 2020 and Central Bank of Nigeria guidelines. The document establishes the priority ranking of the debt, security package, and enforcement rights, while incorporating necessary provisions for foreign exchange considerations if international parties are involved. It is commonly used for corporate financing, project finance, asset acquisition, and working capital facilities, containing all essential provisions required under Nigerian law for creating a legally binding and enforceable lending relationship.

What sections should be included in a Senior Loan Agreement?

1. Parties: Identification of the Lender and Borrower with full legal names and addresses

2. Background: Context of the loan facility and purpose

3. Definitions and Interpretation: Defined terms, construction rules, and interpretation principles

4. The Facility: Loan amount, purpose, and availability

5. Conditions Precedent: Documents and conditions required before drawdown

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

7. Interest: Interest rate, calculation periods, and payment terms

8. Repayment: Repayment schedule, prepayment terms, and mandatory prepayment events

9. Representations and Warranties: Borrower's confirmations regarding its status and capacity

10. Information Undertakings: Borrower's obligations to provide financial and other information

11. General Undertakings: Borrower's positive and negative covenants

12. Financial Covenants: Financial ratios and tests the Borrower must maintain

13. Events of Default: Circumstances allowing acceleration of the loan

14. Security: Security package and enforcement rights

15. Changes to Parties: Assignment and transfer provisions

16. Administration: Payment mechanics, calculations, and notices

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

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

1. Increased Costs: Provisions dealing with regulatory changes affecting the lender's costs - include if lending to regulated entities

2. Tax Gross Up and Indemnities: Provisions for tax payments and indemnities - include if cross-border elements exist

3. Market Disruption: Provisions for dealing with market disruption events - include for LIBOR/SOFR based loans

4. Multiple Lenders: Syndication provisions - include if multiple lenders are involved

5. Agency Provisions: Facility agent's role and responsibilities - include in syndicated loans

6. Currency Provisions: Foreign currency provisions - include if loan is in foreign currency

7. Islamic Finance Provisions: Sharia-compliant provisions - include if Islamic finance principles apply

What schedules should be included in a Senior Loan Agreement?

1. Schedule 1 - Conditions Precedent: Detailed list of required conditions precedent documents

2. Schedule 2 - Form of Drawdown Request: Template for borrower to request loan disbursement

3. Schedule 3 - Repayment Schedule: Detailed amortization schedule if term loan

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

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

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

7. Schedule 7 - Permitted Security: List of security interests permitted under the agreement

8. Schedule 8 - Form of Transfer Certificate: Template for transferring loan participations

9. Appendix A - Existing Indebtedness: List of borrower's existing debt obligations

10. Appendix B - Corporate Structure: Diagram of borrower's corporate structure

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

Nigeria

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use

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