Loan Assignment Agreement Template for Saudi Arabia

The Loan Assignment Agreement is a critical document used in Saudi Arabian financial markets when a lender wishes to transfer its rights and obligations under an existing loan agreement to a new lender. This transfer might occur for various reasons, including portfolio management, regulatory requirements, or strategic business decisions. The agreement must carefully navigate both Saudi civil law requirements and Shariah principles, particularly regarding the treatment of interest (riba) and the transfer of financial obligations. It requires specific provisions addressing SAMA regulations, banking control laws, and often needs Shariah board approval. The document typically includes detailed sections covering the mechanics of the transfer, consideration, representations and warranties, and necessary regulatory and third-party approvals. Given Saudi Arabia's unique legal framework, special attention must be paid to ensuring all aspects of the assignment comply with local laws while maintaining international banking standards.

1. Parties: Identifies and defines the Assignor, Assignee, and other relevant parties including the original borrower

2. Background: Describes the original loan agreement, the reason for assignment, and confirms Shariah compliance of the underlying loan

3. Definitions and Interpretation: Defines key terms and establishes interpretation principles for the agreement

4. Assignment: Core provision detailing the assignment of rights, obligations, and benefits under the loan agreement

5. Consideration: Specifies the consideration for the assignment, ensuring compliance with Shariah principles

6. Effective Date: Establishes when the assignment becomes effective and any conditions precedent

7. Representations and Warranties: Standard representations from both Assignor and Assignee, including Shariah compliance representations

8. Covenants: Ongoing obligations of the parties post-assignment

9. Notice Requirements: Procedures for notifying the borrower and other relevant parties of the assignment

10. Further Assurance: Obligations to execute further documents and take additional steps if needed

11. Governing Law and Jurisdiction: Confirms Saudi Arabian law as governing law and specifies jurisdiction for disputes

12. Miscellaneous: Standard boilerplate provisions including severability, amendments, and counterparts