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Bridge Loan Term Sheet for United Arab Emirates

Bridge Loan Term Sheet Template for United Arab Emirates

A Bridge Loan Term Sheet under UAE law outlines the key commercial and legal terms for a short-term financing arrangement designed to provide interim funding until permanent financing or an alternative source of funds becomes available. This document, governed by UAE Federal laws and regulations, including UAE Federal Law No. 18 of 1993 (Commercial Code) and UAE Central Bank regulations, sets forth the essential elements of the bridge facility including loan amount, interest rate, security requirements, conditions precedent, and key covenants. It serves as the foundation for the subsequent detailed facility documentation while considering UAE-specific requirements regarding interest, security creation, and enforcement mechanisms.

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What is a Bridge Loan Term Sheet?

The Bridge Loan Term Sheet is a crucial preliminary document used in the UAE financial market when companies require interim financing to bridge a temporary funding gap. This document typically precedes the full facility agreement and outlines the fundamental commercial and legal terms of the proposed bridge financing. It is particularly relevant in situations such as acquisition financing, refinancing arrangements, or when awaiting long-term funding solutions. The term sheet must comply with UAE banking regulations, including Central Bank guidelines and Shariah principles where applicable. It serves as a roadmap for the transaction, containing key information about facility amount, tenure, pricing, security structure, and conditions precedent. While non-binding except for certain provisions (such as confidentiality and exclusivity), the Bridge Loan Term Sheet forms the basis for negotiating and preparing detailed facility documentation under UAE law.

What sections should be included in a Bridge Loan Term Sheet?

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

2. Background: Brief context of the bridge financing requirement and transaction overview

3. Definitions: Key terms used throughout the term sheet

4. Facility Amount: Size of the bridge loan facility

5. Purpose: Specified use of proceeds

6. Term and Maturity: Duration of the loan and maturity date

7. Interest Rate: Applicable interest rate, calculation method, and payment frequency

8. Fees: All applicable fees including arrangement, commitment, and exit fees

9. Security: Overview of required security and collateral

10. Conditions Precedent: Key conditions to be satisfied before drawdown

11. Representations and Warranties: Standard representations required from the borrower

12. Key Covenants: Essential financial and operational covenants

13. Events of Default: Key events triggering default

14. Governing Law: Specification of UAE law as governing law

15. Confidentiality: Confidentiality obligations regarding the term sheet

What sections are optional to include in a Bridge Loan Term Sheet?

1. Syndication Provisions: Required if the bridge loan may be syndicated to other lenders

2. Islamic Finance Provisions: Required if the bridge loan needs to be Shariah-compliant

3. Conversion Rights: Include if the bridge loan has potential conversion features to equity

4. Intercreditor Provisions: Required if there are multiple creditors or existing facilities

5. Parent Company Guarantee: Include if parent company guarantee is required

6. Currency Provisions: Required if the loan involves multiple currencies

7. Market Flex: Include for larger facilities that may require syndication

8. Exit Strategy: Include if specific refinancing or repayment sources are identified

What schedules should be included in a Bridge Loan Term Sheet?

1. Term Sheet Summary: One-page summary of key commercial terms

2. Indicative Repayment Schedule: If any amortization or scheduled repayments are contemplated

3. Security Package Details: Detailed list of proposed security and collateral

4. Fee Structure: Detailed breakdown of all fees and calculation methods

5. Form of Drawdown Request: Template for drawdown requests

6. Required Documentation List: Checklist of required documentation for closing

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions








































Clauses




























Relevant Industries

Banking & Financial Services

Real Estate & Construction

Energy & Resources

Healthcare

Technology

Manufacturing

Retail & Consumer

Infrastructure

Telecommunications

Hospitality & Leisure

Transportation & Logistics

Media & Entertainment

Relevant Teams

Legal

Finance

Treasury

Corporate Finance

Risk Management

Compliance

Credit

Corporate Banking

Executive Management

Company Secretarial

Investment

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Finance Manager

Legal Counsel

General Counsel

Financial Controller

Investment Director

Chief Executive Officer

Risk Manager

Compliance Officer

Corporate Banking Officer

Relationship Manager

Credit Risk Officer

Transaction Manager

Company Secretary

Industries








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