Term sheet and mandate phase in loan transactions

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Term sheet and mandate phase in loan transactions
  • Timing
  • What happens during this phase?
  • Key tasks for lawyers within this phase
  • Who does what?

Term sheet and mandate phase in loan transactions

Timing

Loan transactions typically start with the term sheet and mandate phase. During this phase the parties to a potential transaction will enter into confidentiality arrangements, agree the key terms of the transaction and establish their roles in the deal.

The length of this phase will vary considerably, depending on the complexity and nature of the deal.

What happens during this phase?

At the beginning of a transaction the lender and the borrower will enter into confidentiality arrangements. Information will then be provided to the lender by the borrower so that the lender can analyse the risk of lending to the borrower and obtain credit approval for the transaction.

After the lender has performed its due diligence and obtained its credit approval, it will agree the structure of the deal and the main terms of the facility

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