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Refinance Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that facilitates the refinancing of an existing debt or credit facility. The document sets out the terms and conditions for replacing or restructuring existing debt obligations with new financing arrangements, typically with more favorable terms or modified conditions. It incorporates specific UAE regulatory requirements, including Central Bank regulations and local banking practices, while addressing Islamic finance considerations where applicable. The agreement covers crucial elements such as facility terms, security arrangements, representations and warranties, and compliance with UAE financial regulations.

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What is a Refinance Agreement?

A Refinance Agreement is a critical document used when parties wish to restructure or replace existing financial obligations with new financing arrangements in the UAE. This document type is particularly relevant in the UAE market where refinancing activities are subject to specific regulatory oversight from the UAE Central Bank and must comply with local banking regulations. The Refinance Agreement includes detailed provisions covering the termination or modification of existing facilities, establishment of new credit terms, security arrangements, and compliance requirements. It may need to accommodate both conventional and Islamic finance structures, which is particularly relevant in the UAE context. The agreement is typically used when borrowers seek more favorable terms, need to restructure their debt, or want to consolidate multiple facilities. It requires careful consideration of UAE civil and commercial laws, banking regulations, and where applicable, free zone regulations.

What sections should be included in a Refinance Agreement?

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

2. Background: Details of the existing facility being refinanced and the purpose of the refinancing arrangement

3. Definitions and Interpretation: Comprehensive definitions of terms used in the agreement and rules of interpretation

4. The Facility: Details of the new refinancing facility, including amount, purpose, and terms

5. Conditions Precedent: Conditions that must be satisfied before the refinancing becomes effective

6. Repayment and Prepayment: Terms for repayment of the refinanced facility and any prepayment provisions

7. Interest and Fees: Interest rates, calculation methods, and applicable fees

8. Security: Confirmation of existing security arrangements and any additional security requirements

9. Representations and Warranties: Standard and specific representations and warranties from the borrower

10. Covenants: Positive and negative undertakings by the borrower

11. Events of Default: Circumstances constituting default and consequences

12. Changes to Parties: Provisions regarding assignment and transfer rights

13. Administration: Administrative provisions including notices and calculations

14. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction provisions

What sections are optional to include in a Refinance Agreement?

1. Islamic Finance Provisions: Required if the refinancing needs to be Sharia-compliant

2. Property Provisions: Required if real estate is involved as security

3. Intercreditor Provisions: Required if multiple lenders are involved in the refinancing

4. Currency Provisions: Required if the refinancing involves multiple currencies

5. Tax Provisions: Detailed tax provisions required if cross-border elements exist

6. Additional Security Provisions: Required if new security is being taken as part of the refinancing

7. Step-In Rights: Required for project finance refinancing

8. Insurance Requirements: Detailed insurance provisions if specific insurance coverage is required

What schedules should be included in a Refinance Agreement?

1. Schedule 1 - Existing Facility Details: Details of the facility being refinanced

2. Schedule 2 - Conditions Precedent: Detailed list of required conditions precedent documents

3. Schedule 3 - Repayment Schedule: Detailed repayment schedule for the refinanced facility

4. Schedule 4 - Form of Drawdown Request: Standard form for requesting drawdowns under the facility

5. Schedule 5 - Security Documents: List and copies of all security documents

6. Schedule 6 - Financial Covenants: Detailed financial covenants and calculation methods

7. Schedule 7 - Forms of Transfer Documents: Standard forms for transferring rights under the agreement

8. Appendix A - Existing Security Confirmation: Confirmation of existing security arrangements

9. Appendix B - Fee Schedule: Detailed breakdown of all applicable fees

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

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use

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