Document background
The Facility Letter is a crucial document in Danish banking practice, used to formalize credit arrangements between financial institutions and borrowers. It serves as a more concise alternative to a full facility agreement, particularly suitable for bilateral facilities or straightforward credit arrangements. The document must comply with Danish banking regulations, including the Danish Financial Business Act and Danish Contracts Act, while addressing key commercial terms such as facility amount, purpose, interest rates, fees, and security requirements. Facility Letters are commonly used for both corporate and individual borrowers, though the complexity and included terms may vary depending on the borrower type and facility purpose. The document needs to balance comprehensive coverage of essential terms with the relative simplicity expected of a letter format, while ensuring enforceability under Danish law.
