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The Letter of Credit Loan agreement is essential for businesses engaged in international trade in Indonesia requiring trade financing support. This document is used when a company needs a credit facility specifically for issuing letters of credit, typically for import/export transactions. The agreement establishes the relationship between the bank and the borrower, setting out the terms under which the bank will issue L/Cs, including facility limits, security requirements, and operational procedures. It ensures compliance with Indonesian banking regulations while incorporating international banking standards such as UCP 600. The document is particularly crucial for companies managing international supply chains, as it provides them with a secure method of conducting international trade transactions while maintaining working capital efficiency.

1. Parties: Identification of the lender (bank) and the borrower, including their complete legal names, registration numbers, and addresses

2. Background: Context of the L/C facility, including the borrower's business purpose for the L/C and the bank's agreement to provide the facility

3. Definitions: Definitions of key terms used throughout the agreement, including banking, L/C, and technical terms

4. Facility Terms: Details of the L/C facility including the maximum facility amount, tenure, and purpose

5. L/C Issuance Conditions: Conditions precedent and procedures for L/C issuance, including documentation requirements

6. Fees and Charges: All applicable fees, including issuance fees, amendment fees, and other charges

7. Payment Terms: Terms for repayment of the L/C loan, including payment schedule and currency provisions

8. Security Arrangements: Details of any required collateral, margins, or cash deposits

9. Representations and Warranties: Standard and specific representations and warranties from the borrower

10. Covenants: Positive and negative covenants applicable to the borrower

11. Events of Default: Circumstances constituting default and their consequences

12. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes