Document background
The Debt Financing Term Sheet is a crucial preliminary document used in Canadian financing transactions to establish the fundamental terms of a lending arrangement before proceeding with full documentation. It typically comes into play when a borrower seeks significant debt financing from one or multiple lenders, whether for general corporate purposes, acquisitions, project finance, or refinancing existing debt. The document outlines essential elements including facility amount, interest rates, repayment terms, security package, and key conditions, while ensuring compliance with Canadian federal and provincial regulations. Though mostly non-binding, it represents a significant milestone in financing negotiations and serves as a roadmap for lawyers drafting the definitive agreements. This document is particularly important in the Canadian context where financing transactions often involve multiple provinces and must navigate both common law and civil law systems (in Quebec).
