Document background
The Facilities Agreement is a fundamental document used in Saudi Arabian financing transactions to establish and govern credit arrangements between financial institutions and borrowers. It must be structured to comply with both Saudi Arabian law and Islamic (Shariah) principles, typically utilizing Islamic financing structures such as Murabaha, Ijara, or Wakala. The agreement covers essential elements including facility terms, profit calculations, security arrangements, representations, covenants, and events of default. It's particularly important in corporate financing, project finance, and general commercial lending scenarios where traditional interest-based lending is not permissible. The document needs to address specific Saudi Arabian regulatory requirements, including Saudi Arabian Monetary Authority (SAMA) regulations and the Banking Control Law, while ensuring enforceability under local courts and dispute resolution mechanisms.
