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Credit Assignment Agreement Template for Indonesia

A Credit Assignment Agreement under Indonesian law is a legally binding document that facilitates the transfer of credit rights from one party (the Assignor) to another (the Assignee). The agreement must comply with the Indonesian Civil Code (KUHPerdata), particularly Articles 613-624 on assignment of receivables (cessie), and relevant OJK regulations. It details the terms and conditions of the credit transfer, including the purchase price, representations and warranties, and completion requirements. The document must address specific Indonesian law requirements such as mandatory notification to the debtor and potential registration requirements.

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What is a Credit Assignment Agreement?

The Credit Assignment Agreement is a crucial document used in Indonesian financial and business transactions when one party wishes to transfer its credit rights to another party. This document is particularly relevant in scenarios such as debt portfolio sales, corporate restructuring, or financial institution portfolio management. The agreement must comply with Indonesian law, specifically the Civil Code (KUHPerdata) and OJK regulations, and includes detailed provisions about the credit being assigned, purchase price, warranties, and completion requirements. It requires careful consideration of local regulatory requirements, including mandatory notification to debtors and potential registration with relevant authorities. The document is commonly used by banks, financial institutions, and corporations operating in Indonesia, and may require additional provisions when involving foreign parties or cross-border elements.

What sections should be included in a Credit Assignment Agreement?

1. Parties: Identification of the Assignor and Assignee, including their full legal names, registration numbers, addresses, and authorized representatives

2. Background: Context of the credit assignment, including details of the original credit agreement and the reason for the assignment

3. Definitions: Definitions of key terms used throughout the agreement, including 'Credit', 'Assignment Date', 'Original Credit Agreement', etc.

4. Assignment: Core provision detailing the transfer of rights from Assignor to Assignee, including the specific credit being assigned

5. Purchase Price: The amount to be paid for the assignment and payment terms

6. Completion: Details of when and how the assignment will be completed, including conditions precedent

7. Representations and Warranties: Standard warranties from both parties, especially regarding the Assignor's right to assign the credit

8. Assignor's Obligations: Obligations of the Assignor including delivery of documents and cooperation in the transfer

9. Notice and Registration: Requirements for notifying the original debtor and any registration requirements

10. Costs and Taxes: Allocation of costs, expenses, and tax obligations related to the assignment

11. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes

12. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, amendments, etc.

What sections are optional to include in a Credit Assignment Agreement?

1. Security Assignment: Required when any security interests are being transferred along with the credit

2. Foreign Currency Provisions: Required when the credit or purchase price involves foreign currency

3. Regulatory Compliance: Specific section needed when either party is a regulated entity like a bank

4. Third Party Consents: Required when the assignment requires consent from other parties

5. Data Protection: Required when personal data is involved in the assigned credit

6. Step-In Rights: Optional provisions for the Assignee's rights to step into ongoing proceedings

7. Further Assurance: Optional detailed provisions about future cooperation and documentation

What schedules should be included in a Credit Assignment Agreement?

1. Schedule 1 - Details of the Assigned Credit: Detailed description of the credit being assigned, including amount, interest rate, maturity, and payment history

2. Schedule 2 - Original Credit Agreement: Copy or summary of the original credit agreement being assigned

3. Schedule 3 - Form of Notice to Debtor: Template of the notice to be sent to the original debtor regarding the assignment

4. Schedule 4 - Completion Requirements: Checklist of documents and actions required for completion

5. Schedule 5 - Security Documents: List and copies of any security documents related to the assigned credit

6. Appendix A - Power of Attorney: Form of power of attorney for registration and other formal requirements

7. Appendix B - Corporate Authorizations: Copies of relevant corporate authorizations and powers of attorney

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

Jurisdiction

Indonesia

Document Type

Credit Agreement

Sector

Banking

Cost

Free to use

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