Corporate Loan Agreement for New Zealand

Corporate Loan Agreement Template for New Zealand

A comprehensive legal agreement governed by New Zealand law that establishes the terms and conditions under which a financial institution provides loan facilities to a corporate borrower. The document details all aspects of the lending relationship including facility amount, interest rates, repayment terms, security arrangements, representations and warranties, covenants, and events of default. It incorporates specific requirements under New Zealand financial and corporate law, including compliance with the Contract and Commercial Law Act 2017 and the Companies Act 1993, while addressing security requirements under the Personal Property Securities Act 1999.

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What is a Corporate Loan Agreement?

The Corporate Loan Agreement is a fundamental document in corporate financing transactions under New Zealand law, used when a financial institution provides debt financing to a corporate entity. This agreement is essential for both bilateral and syndicated lending arrangements, establishing the comprehensive framework for the lending relationship. It contains detailed provisions covering facility terms, conditions precedent, drawdown mechanics, interest calculations, repayment obligations, security requirements, and covenant packages. The document ensures compliance with New Zealand regulatory requirements, including those under the Financial Markets Conduct Act 2013 and the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. It's particularly crucial for significant corporate borrowings where clear documentation of rights, obligations, and security arrangements is essential for all parties.

What sections should be included in a Corporate Loan Agreement?

1. Parties: Identifies the lender(s) and borrower(s) with their full legal names and addresses

2. Background: Sets out the context of the loan agreement and summarizes the transaction

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

4. The Facility: Details the loan amount, purpose, and availability period

5. Conditions Precedent: Lists conditions that must be satisfied before the loan can be drawn

6. Drawdown: Specifies the drawdown mechanics, notice requirements, and procedures

7. Interest: Sets out interest rates, calculation methods, and payment periods

8. Repayment: Details repayment terms, scheduled payments, and prepayment provisions

9. Representations and Warranties: Lists the borrower's representations and warranties

10. Covenants: Specifies positive and negative covenants the borrower must comply with

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

12. Security: Describes the security structure and enforcement rights

13. Costs and Expenses: Allocates responsibility for fees, costs, and expenses

14. Changes to Parties: Covers assignment and transfer provisions

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

16. General Provisions: Contains boilerplate clauses including governing law, jurisdiction, and severability

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

1. Syndication Provisions: Required for syndicated loans involving multiple lenders, including facility agent and security trustee provisions

2. Accordion Facility: Optional section for when the agreement includes the ability to increase the facility amount

3. Multiple Currencies: Required when the loan can be drawn in different currencies

4. Guarantees: Necessary when third-party guarantees are part of the security structure

5. Letter of Credit Facility: Required if the agreement includes LC issuance facilities

6. Market Disruption: Important for floating rate facilities to address market disruption events

7. Tax Gross-Up and Indemnities: Detailed tax provisions required for cross-border lending or complex tax structures

8. Increased Costs: Required for longer-term facilities to address regulatory changes affecting lenders' costs

9. Set-off Rights: Optional provisions for lender's set-off rights

10. Bank Accounts: Required when the agreement includes specific account maintenance requirements

What schedules should be included in a Corporate Loan Agreement?

1. Conditions Precedent: Detailed list of required documents and conditions

2. Form of Drawdown Notice: Template for borrower to request loan disbursements

3. Repayment Schedule: Detailed schedule of repayment dates and amounts

4. Financial Covenants: Detailed financial covenants calculations and reporting requirements

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

6. Security Details: Comprehensive list of security documents and secured assets

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

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

9. Existing Financial Indebtedness: Schedule of borrower's existing debt

10. Address Details: Contact details for notices and communications

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

New Zealand

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Corporate Finance

Commercial Real Estate

Manufacturing

Retail

Technology

Infrastructure

Energy

Healthcare

Transportation

Agriculture

Mining and Resources

Telecommunications

Construction

Professional Services

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit

Operations

Company Secretariat

Due Diligence

Transaction Management

Relationship Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Relationship Manager

Credit Risk Manager

Loan Officer

Compliance Officer

Company Secretary

Financial Controller

Banking Partner

Transaction Manager

Security Trustee Officer

Facility Agent

Corporate Banking Manager

Risk Manager

Due Diligence Officer

Industries
Contract and Commercial Law Act 2017: This Act provides the fundamental framework for contract formation, interpretation, and enforcement in New Zealand. It covers areas such as contractual mistakes, remedies, and electronic transactions.
Companies Act 1993: Essential for understanding corporate borrower's legal status, capacity to borrow, and directors' duties. Also covers company administration and corporate governance requirements.
Personal Property Securities Act 1999: Crucial for securing the loan against personal property of the corporate borrower, establishing priority rights, and registration requirements for security interests.
Property Law Act 2007: Relevant for any real property security aspects of the loan and mortgage arrangements, including enforcement rights and procedural requirements.
Credit Contracts and Consumer Finance Act 2003: While primarily focused on consumer credit, certain provisions may apply to corporate lending, particularly regarding disclosure requirements and unfair contract terms.
Financial Markets Conduct Act 2013: Relevant if the loan arrangement involves any financial products or if there are multiple lenders involved, particularly regarding disclosure requirements and fair dealing obligations.
Anti-Money Laundering and Countering Financing of Terrorism Act 2009: Imposes obligations on lenders regarding customer due diligence, reporting of suspicious transactions, and record-keeping requirements.
Fair Trading Act 1986: Ensures fair trading practices and prohibits misleading and deceptive conduct in business transactions, including loan agreements.
Privacy Act 2020: Governs the collection, use, and disclosure of personal information in the context of corporate lending, particularly relevant for personal guarantees and director information.
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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