Document background
The Debt Facility Agreement serves as the primary documentation for Shariah-compliant financing arrangements in Saudi Arabia, used when a party requires substantial funding for business operations, expansion, or specific projects. This document is essential in the Saudi Arabian market where all financial transactions must comply with Islamic principles and local regulations. The agreement typically incorporates specific Islamic financing structures (such as Murabaha, Ijara, or Wakala), details the profit rate mechanisms, repayment terms, security arrangements, and covenant packages. It must align with Saudi Arabian law, including SAMA regulations, the Commercial Courts Law, and Shariah principles, while also addressing practical commercial requirements. The document is particularly crucial for corporate borrowings, project finance, and structured finance transactions in Saudi Arabia, requiring careful consideration of both conventional financing principles and Islamic finance requirements.
