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Loan Facility Agreement for Nigeria

Loan Facility Agreement Template for Nigeria

A comprehensive legal agreement governed by Nigerian law that establishes the terms and conditions under which a lender provides financial accommodation to a borrower. The document incorporates essential provisions required by Nigerian banking regulations, including BOFIA 2020 compliance requirements, and addresses key aspects such as facility amount, interest calculations, repayment terms, security arrangements, events of default, and enforcement mechanisms. It includes specific provisions for Nigerian corporate and banking law compliance, while also considering local security registration requirements and enforcement procedures.

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Loan Facility Agreement

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What is a Loan Facility Agreement?

The Loan Facility Agreement is a crucial document used in Nigerian banking and finance transactions to formalize lending arrangements between financial institutions and borrowers. This agreement is essential when providing credit facilities in Nigeria, whether for corporate financing, project development, or asset acquisition. The document must comply with Nigerian banking regulations, particularly the Banks and Other Financial Institutions Act (BOFIA) 2020, and includes provisions for security creation, registration requirements, and enforcement under Nigerian law. It addresses key aspects such as conditions precedent, drawdown mechanics, interest calculations, repayment terms, borrower covenants, and events of default, while incorporating specific requirements for Nigerian security perfection and enforcement procedures. The agreement is adaptable for various lending scenarios, from simple bilateral facilities to complex syndicated arrangements, and can accommodate both corporate and individual borrowers.

What sections should be included in a Loan Facility Agreement?

1. Parties: Identifies and defines the Lender, Borrower, and any other parties to the agreement

2. Background: Sets out the context and purpose of the facility

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

4. The Facility: Details the amount, purpose, and basic terms of the loan facility

5. Conditions Precedent: Specifies conditions that must be satisfied before drawdown

6. Drawdown: Sets out the mechanism and requirements for drawing down the facility

7. Interest: Specifies interest rate, calculation method, and payment terms

8. Repayment and Prepayment: Details repayment schedule, prepayment terms, and related conditions

9. Representations and Warranties: Contains borrower's confirmations about their status and capacity

10. Covenants: Sets out positive and negative obligations of the borrower

11. Events of Default: Lists circumstances that trigger default and lender's enforcement rights

12. Fees and Expenses: Details all fees, costs, and expenses payable under the facility

13. Changes to Parties: Addresses assignment and transfer rights

14. Notices: Specifies how formal communications should be made

15. Calculations and Certificates: Establishes basis for calculations and evidential value of certificates

16. Partial Invalidity: Preserves remainder of agreement if parts are invalid

17. Remedies and Waivers: Addresses cumulative nature of rights and effect of waiver

18. Governing Law and Enforcement: Specifies Nigerian law as governing law and enforcement provisions

What sections are optional to include in a Loan Facility Agreement?

1. Security: Required when facility is secured - details security arrangements and enforcement rights

2. Guarantee: Required when facility is guaranteed - contains guarantee terms and guarantor obligations

3. Increased Costs: Used for longer-term facilities to address regulatory changes affecting lender's costs

4. Tax Gross Up and Indemnities: Used when tax implications need specific attention, especially with corporate borrowers

5. Currency Provisions: Required for facilities involving foreign currency or multiple currencies

6. Set-off: Optional rights of set-off against borrower's other accounts

7. Multi-borrower Provisions: Required when facility involves multiple borrowers

8. Agency and Trust Provisions: Required for syndicated facilities with multiple lenders

9. Islamic Finance Provisions: Required when facility needs to be Sharia-compliant

What schedules should be included in a Loan Facility Agreement?

1. Conditions Precedent: Detailed list of required documents and conditions

2. Form of Drawdown Request: Template for borrower to request drawdown of facility

3. Repayment Schedule: Detailed schedule of repayment dates and amounts

4. Form of Transfer Certificate: Template for transferring rights/obligations under the facility

5. Security Documents: Forms of security documents or list of security requirements

6. Fees Schedule: Detailed breakdown of all applicable fees

7. Financial Covenants: Detailed financial ratios and calculations

8. Form of Compliance Certificate: Template for periodic compliance certification

9. Existing Security/Indebtedness: List of permitted existing security or indebtedness

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

Jurisdiction

Nigeria

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions










Clauses










































Relevant Industries

Banking

Financial Services

Real Estate

Manufacturing

Agriculture

Oil & Gas

Technology

Telecommunications

Construction

Healthcare

Education

Retail

Infrastructure

Mining

Transportation

Energy

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Credit

Corporate Banking

Commercial Banking

Operations

Strategy

Management

Company Secretariat

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Banking Lawyer

Finance Manager

Treasury Manager

Risk Manager

Compliance Officer

Credit Officer

Relationship Manager

Transaction Manager

Company Secretary

Managing Director

Chief Executive Officer

Financial Controller

Account Manager

Loan Officer

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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