Document background
The Credit Facility Letter is a fundamental document in Danish banking practice, used when a financial institution agrees to provide credit to a borrower. It combines elements of both a formal offer letter and a binding agreement, structured to comply with Danish financial regulations and EU directives. The document is typically issued following credit committee approval and detailed due diligence, serving as the primary document that establishes the lending relationship. A Credit Facility Letter must include mandatory disclosures required under Danish law, including clear terms regarding interest rates, fees, and borrower's rights. It's particularly important in the Danish context where financial transparency and consumer protection are heavily emphasized. The document can be used for various types of credit facilities, from simple overdrafts to complex revolving credit facilities, and must be adapted to meet specific regulatory requirements depending on whether the borrower is a consumer or a corporate entity.
