The Credit Facility Letter is a fundamental document in Danish banking practice, used when a financial institution agrees to provide credit to a borrower. It combines elements of both a formal offer letter and a binding agreement, structured to comply with Danish financial regulations and EU directives. The document is typically issued following credit committee approval and detailed due diligence, serving as the primary document that establishes the lending relationship. A Credit Facility Letter must include mandatory disclosures required under Danish law, including clear terms regarding interest rates, fees, and borrower's rights. It's particularly important in the Danish context where financial transparency and consumer protection are heavily emphasized. The document can be used for various types of credit facilities, from simple overdrafts to complex revolving credit facilities, and must be adapted to meet specific regulatory requirements depending on whether the borrower is a consumer or a corporate entity.
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Key Requirements PROMPT example:
Credit Facility Letter
I need a Danish law Credit Facility Letter for a 鈧5 million secured revolving credit facility to a medium-sized manufacturing company, with quarterly interest payments and a termination date of March 15, 2025.
1. Bank Details and Date: Letterhead with bank's details and date of the letter
2. Recipient Details: Full name and address of the borrower
3. Salutation: Formal greeting to the borrower
4. Facility Approval: Statement confirming the approval of the credit facility
5. Facility Type and Amount: Clear specification of the type of facility and the approved amount
6. Interest Rate: Detailed breakdown of applicable interest rates, including reference rate and margin
7. Fees and Charges: All applicable fees including arrangement fees, commitment fees, and other charges
8. Availability Period: Period during which the facility can be drawn
9. Purpose: Permitted purpose(s) for which the facility may be used
10. Repayment Terms: Schedule and method of repayment
11. Key Conditions Precedent: Essential conditions that must be satisfied before drawdown
12. Security Requirements: Overview of required security or collateral
13. Key Covenants: Essential financial and non-financial covenants
14. Events of Default: Key events that would trigger default
15. Acceptance Instructions: Instructions for accepting the facility offer
16. Closing and Signature: Bank's signature and space for borrower's acceptance
1. Hedging Requirements: Required for facilities with mandatory hedging obligations
2. Syndication Provisions: Required for facilities that may be syndicated
3. Multiple Drawing Provisions: For facilities allowing multiple drawdowns
4. Currency Provisions: For multi-currency facilities
5. Group Structure: For corporate borrowers with complex group structures
6. Guarantee Requirements: When third-party guarantees are required
7. Reference Rate Transition: For facilities that may be affected by LIBOR transition or other reference rate changes
8. Green Loan Provisions: For facilities qualifying as green loans or sustainability-linked loans
1. Definitions: Detailed definitions of terms used in the facility letter
2. Conditions Precedent: Comprehensive list of all required conditions precedent
3. Form of Drawdown Request: Template for borrower to request drawings under the facility
4. Repayment Schedule: Detailed amortization schedule for term facilities
5. Fee Schedule: Detailed breakdown of all fees and charges
6. Financial Covenants: Detailed financial covenants including calculations and reporting requirements
7. Standard Terms and Conditions: Bank's standard terms and conditions applicable to the facility
8. Security Details: Comprehensive details of required security package and perfection requirements
Authors
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
Corporate Lending
Real Estate
Manufacturing
Retail
Technology
Healthcare
Energy
Infrastructure
Agriculture
Shipping
Construction
Professional Services
Telecommunications
Hospitality
Relevant Teams
Legal
Finance
Treasury
Credit Risk
Compliance
Corporate Banking
Loan Operations
Risk Management
Credit Administration
Documentation
Portfolio Management
Relationship Management
Transaction Banking
Securities
Regulatory Reporting
Relevant Roles
Chief Financial Officer
Treasury Manager
Finance Director
Credit Officer
Relationship Manager
Risk Manager
Legal Counsel
Compliance Officer
Corporate Banking Manager
Credit Analyst
Financial Controller
Banking Operations Manager
Senior Loan Officer
Corporate Secretary
Head of Lending
Chief Credit Officer
Portfolio Manager
Debt Finance Manager
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