How to draft and negotiate a facility agreement

Copyright © 2025 LexisNexis
Published by a LexisNexis Banking & Finance expert
Practice notes

How to draft and negotiate a facility agreement

Copyright © 2025 LexisNexis

Published by a LexisNexis Banking & Finance expert

Practice notes
imgtext

This ‘How to’ guide provides an introduction to drafting and negotiating a facility agreement for those new to lending transactions. It contains a table of useful precedents, guidance on how a facility agreement is structured, and some key areas to focus on when drafting and negotiating a facility agreement, together with links to more detailed materials. See also Practice Note: Introductory guide to lending which explains the role of the facility agreement in the context of a loan transaction.

Finding a precedent facility agreement

The lender's lawyers will usually, but not always, prepare the first draft of the facility agreement.

What kind of precedent is needed?

When looking for a suitable precedent facility agreement, it is important to understand the nature of the loan transaction, as this will influence what precedent you need. In particular, you will need to know:

  1. •

    the type of facility involved, eg term facility, letter of credit facility, a revolving credit facility, overdraft—see Practice Note: Overdrafts, term loans and revolving credit facilities for information on the various types of facility

Powered by Lexis+®
Jurisdiction(s):
United Kingdom
Key definition:
Lending definition
What does Lending mean?

The lending of copies of the work available for use, on terms that it will or may be returned.

Read more readmore

Popular documents

Types of borrowers

Types of borrowersEconomic Crime and Corporate Transparency Act 2023—reform of limited partnerships: The Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) received Royal Assent on 26 October 2023. Its provisions will come into force over an extended period of time. For more

Selling a loan by sub-participation

Selling a loan by sub-participationSub-participation is a means by which a lender can transfer its risk in a loan to another entity.For more general information on loan transfers in a lending context, see Practice Note: Key issues in loan transfers.What is meant by

The security agent and security trust provisions

The security agent and security trust provisionsThe security agentIn a syndicated loan transaction, the security agent (sometimes also known as the security trustee) (the Security Agent) will hold the transaction security on trust for the creditors as a whole, the membership of which can vary from

Introduction to fund finance—capital call facilities

Introduction to fund finance—capital call facilitiesThis Practice Note discusses:•what is meant by capital call facilities, NAV, or asset backed facilities, and hybrid facilities•the commercial use of capital call facilities•the due diligence that lenders will conduct•the standard security package