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The Subsidiary Loan Agreement is a crucial document used when a parent company provides financing to its subsidiary in Malaysia. This type of agreement is commonly utilized for various purposes including working capital funding, expansion projects, or restructuring existing debt. The document must comply with Malaysian law, particularly the Companies Act 2016, Financial Services Act 2013, and relevant Bank Negara Malaysia regulations. A Subsidiary Loan Agreement typically includes comprehensive terms covering the facility amount, interest calculations, repayment schedules, security arrangements, financial covenants, and reporting requirements. It's essential for documenting intercompany lending and ensuring proper corporate governance within group structures operating in or from Malaysia.

1. Parties: Identifies the lender (typically parent company) and borrower (subsidiary) with full legal names and registration details

2. Background: Sets out the context of the loan, relationship between the parties, and purpose of the facility

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation principles

4. The Facility: Details the amount, purpose, and nature of the loan facility

5. Conditions Precedent: Lists the conditions that must be satisfied before the loan can be drawn

6. Drawdown: Specifies the drawdown mechanics, notice requirements, and drawdown periods

7. Interest: Sets out interest rate, calculation method, and payment dates

8. Repayment: Details the repayment schedule, prepayment provisions, and payment mechanics

9. Representations and Warranties: Contains standard representations and warranties from the borrower

10. Covenants: Lists positive and negative obligations of the borrower during the loan period

11. Events of Default: Defines circumstances constituting default and consequences

12. Miscellaneous: Contains standard boilerplate provisions including notices, amendments, and assignment

13. Governing Law and Jurisdiction: Specifies Malaysian law as governing law and jurisdiction for disputes