Revolving Credit Facility Agreement for Pakistan

Revolving Credit Facility Agreement Template for Pakistan

A comprehensive financing agreement governed by Pakistani law that establishes a revolving credit facility between a financial institution (lender) and a corporate entity (borrower). The agreement complies with Pakistani banking regulations, including the Banking Companies Ordinance 1962 and State Bank of Pakistan regulations, while incorporating necessary Islamic banking considerations where applicable. It details the terms and conditions for multiple drawdowns and repayments within an overall facility limit, including interest calculations, security arrangements, covenants, and events of default, all structured within the Pakistani legal framework.

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What is a Revolving Credit Facility Agreement?

The Revolving Credit Facility Agreement is a crucial financing document used when a borrower requires flexible access to funding over an extended period. This agreement, governed by Pakistani law, enables borrowers to draw down, repay, and re-borrow funds multiple times within a prescribed limit and tenure. It incorporates mandatory requirements under Pakistani banking regulations, including the Banking Companies Ordinance 1962, State Bank of Pakistan guidelines, and where applicable, Islamic banking principles. The document is particularly useful for businesses with fluctuating working capital needs or seasonal funding requirements, providing detailed terms for utilization, interest calculation, security arrangements, financial covenants, and reporting obligations. It includes specific provisions for compliance with local regulatory requirements, including foreign exchange regulations when applicable.

What sections should be included in a Revolving Credit Facility Agreement?

1. Parties: Identification of the lender(s), borrower(s), and any guarantors or security providers

2. Background: Recitals explaining the context and purpose of the facility

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

4. The Facility: Core terms of the revolving credit facility including amount, purpose, and availability period

5. Conditions Precedent: Conditions that must be satisfied before drawdown

6. Drawdown Mechanics: Procedures and requirements for utilizing the facility

7. Repayment and Prepayment: Terms for repayment, prepayment options, and consequences

8. Interest and Fees: Interest calculation, payment terms, and applicable fees

9. Tax Provisions: Treatment of taxes, withholding requirements, and gross-up provisions

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

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

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

13. General Undertakings: Borrower's operational and corporate obligations

14. Events of Default: Circumstances constituting default and consequences

15. Changes to Parties: Rules for assignments, transfers, and changes to facility participants

16. Administration: Payment mechanics, calculations, and notices

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

What sections are optional to include in a Revolving Credit Facility Agreement?

1. Islamic Banking Provisions: Required if the facility needs to comply with Shariah principles

2. Security Provisions: Required if the facility is secured, detailing the security structure

3. Guarantees: Required if third-party guarantees are part of the credit support

4. Syndication Provisions: Required for syndicated facilities with multiple lenders

5. Foreign Currency Provisions: Required if the facility involves foreign currency

6. Increased Costs and Market Disruption: Optional provisions for managing market changes and regulatory costs

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

8. Multi-currency Provisions: Required if multiple currencies are permitted under the facility

What schedules should be included in a Revolving Credit Facility Agreement?

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

2. Form of Drawdown Request: Template for borrower's utilization requests

3. Form of Compliance Certificate: Template for periodic compliance confirmation

4. Repayment Schedule: If applicable, schedule of repayment dates and amounts

5. Financial Covenants Calculations: Detailed methodology for calculating financial covenants

6. Security Documents: List and copies of security documentation

7. Existing Encumbrances: List of permitted existing security interests

8. Form of Transfer Certificate: Template for transferring participations in the facility

9. Form of Assignment Agreement: Template for assigning rights under the facility

10. Contact Details: Administrative and notice details for all parties

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

Pakistan

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Manufacturing

Real Estate and Construction

Energy and Utilities

Telecommunications

Technology

Healthcare

Retail and Consumer Goods

Agriculture

Transportation and Logistics

Mining and Natural Resources

Infrastructure Development

Export and Import

Hospitality

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit

Operations

Company Secretarial

Transaction Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Banking Officer

Credit Risk Manager

Legal Counsel

Compliance Officer

Relationship Manager

Corporate Finance Manager

Financial Controller

Company Secretary

Banking Operations Manager

Credit Analyst

Transaction Manager

Facility Administrator

Industries
Contract Act 1872: Fundamental law governing contract formation, validity, and enforcement in Pakistan. Essential for basic contractual provisions, including offer, acceptance, consideration, and capacity of parties.
Banking Companies Ordinance 1962: Regulates banking operations and financial institutions in Pakistan. Relevant for lending operations, credit facilities, and banking compliance requirements.
Financial Institutions (Recovery of Finances) Ordinance 2001: Governs the recovery of finances by banking companies and financial institutions, including enforcement mechanisms and remedies.
State Bank of Pakistan Act 1956: Establishes regulatory framework for banking operations and monetary policy. Important for compliance with central bank regulations regarding credit facilities.
Stamp Act 1899: Determines stamp duty requirements for financial documents and agreements. Critical for ensuring proper execution and admissibility of the agreement in court.
Registration Act 1908: Governs registration requirements for certain types of documents and agreements, particularly when involving immovable property as security.
Foreign Exchange Regulation Act 1947: Relevant if the facility involves foreign currency or cross-border elements. Regulates foreign exchange transactions and requirements.
Prudential Regulations for Corporate/Commercial Banking: State Bank of Pakistan's guidelines for corporate lending, including requirements for credit facilities, exposure limits, and risk management.
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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