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Credit Agreement Letter

Credit Agreement Letter Template for Saudi Arabia

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Key Requirements PROMPT example:

Credit Agreement Letter

"I need a Credit Agreement Letter for a 5 million SAR Murabaha facility to a manufacturing company in Riyadh, with quarterly profit payments and maturity in March 2025, secured by company equipment and personal guarantee from the chairman."

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Document background
The Credit Agreement Letter is a fundamental document in Saudi Arabian banking and finance, used to formalize Shariah-compliant financing arrangements between financial institutions and their clients. It serves as an official offer of credit facilities, detailing the terms and conditions under which the financing will be provided. The document must strictly adhere to Islamic finance principles and Saudi Arabian banking regulations, including those set by the Saudi Central Bank (SAMA). This letter format is particularly useful for both individual and corporate financing, providing a more concise alternative to full credit agreements while maintaining legal enforceability. The document typically includes key elements such as facility amount, profit rate structure, payment terms, security requirements, and conditions precedent, all structured in compliance with Islamic finance principles.
Suggested Sections

1. Header Information: Date, reference number, and addressee details

2. Opening Salutation: Formal greeting and reference to any previous correspondence

3. Subject Line: Clear indication that this is a Credit Agreement Letter

4. Facility Overview: Brief summary of the credit facility being offered

5. Key Terms: Essential financial terms including facility amount, profit rate (Shariah-compliant), and tenure

6. Payment Terms: Schedule and method of payments, including any installment details

7. Security Requirements: Details of any required collateral or guarantees

8. Key Conditions: Preconditions and ongoing conditions for the facility

9. Shariah Structure: Explanation of the Islamic financing structure being used

10. Representations: Key statements about the borrower's status and capacity

11. Undertakings: Core obligations of the borrower

12. Events of Default: Key circumstances that would constitute default

13. Acceptance Section: Space for acknowledgment and acceptance of terms

14. Closing: Formal closing, signature blocks, and bank contact details

Optional Sections

1. Purpose of Facility: Detailed description of the intended use of funds - include when facility is restricted to specific uses

2. Insurance Requirements: Specific insurance requirements - include when collateral requires insurance coverage

3. Special Conditions: Any unique terms specific to the borrower - include for non-standard arrangements

4. Fee Structure: Breakdown of applicable fees - include when multiple fees apply

5. Reporting Requirements: Specific reporting obligations - include for corporate borrowers or larger facilities

6. Cross-Default Provisions: References to other facilities - include when borrower has multiple facilities

Suggested Schedules

1. Payment Schedule: Detailed breakdown of payment dates and amounts

2. Profit Calculation: Explanation of how the Shariah-compliant profit is calculated

3. Required Documents: List of documents required for drawdown

4. Security Details: Detailed description of required security/collateral

5. Facility Drawdown Procedures: Step-by-step process for accessing the credit facility

6. Contact Details: List of relevant bank personnel and their contact information

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Acceptance Period
Account
Applicable Law
Banking Day
Borrower
Business Day
Collateral
Conditions Precedent
Cost Price
Default
Default Rate
Effective Date
Event of Default
Facility
Facility Amount
Facility Period
Financial Statements
Guarantee
Guarantor
Ijara
Islamic Banking Rules
Letter
Material Adverse Effect
Maturity Date
Murabaha
Obligor
Payment Date
Profit Rate
Purchase Price
Purpose
Repayment Schedule
SAMA
Sale Price
Security
Security Documents
Shariah
Taxes
Transaction Documents
Undertaking
Relevant Industries

Banking and Financial Services

Islamic Finance

Real Estate

Commercial and Industrial

Retail

Construction

Manufacturing

Trading

Healthcare

Education

Transportation

Technology

Agriculture

Energy

Relevant Teams

Legal

Credit

Risk Management

Islamic Banking

Corporate Banking

Retail Banking

Compliance

Operations

Documentation

Treasury

Finance

Business Development

Customer Relations

Relevant Roles

Credit Manager

Islamic Banking Officer

Relationship Manager

Legal Counsel

Shariah Compliance Officer

Risk Manager

Chief Financial Officer

Treasury Manager

Credit Analyst

Corporate Banking Manager

Retail Banking Manager

Documentation Officer

Compliance Officer

Business Development Manager

Account Manager

Industries
Islamic Law (Shariah): Fundamental law of Saudi Arabia that prohibits interest (riba) and requires financial transactions to be structured in compliance with Islamic principles
Banking Control Law (Royal Decree No. M/5): Regulates banking operations and financial institutions in Saudi Arabia, including credit facilities and banking licenses
SAMA Rules on Consumer Finance: Regulations issued by the Saudi Central Bank governing consumer financing activities, including requirements for disclosure, fair treatment, and responsible lending practices
Commercial Courts Law: Governs commercial disputes and enforcement of commercial contracts, including credit agreements
Civil Transactions Law: Regulates civil transactions and contractual relationships, including principles of contract formation, validity, and enforcement
Anti-Money Laundering Law: Requires financial institutions to implement specific procedures for customer due diligence and reporting suspicious transactions
Credit Information Law: Regulates the collection, processing, and sharing of credit information, affecting credit assessment procedures
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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