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Credit Facility Letter for the Netherlands

Credit Facility Letter Template for Netherlands

A Credit Facility Letter under Dutch law is a formal document issued by a financial institution to extend credit to a borrower, outlining the terms and conditions of the credit facility. This document, governed by Dutch financial regulations and civil law, particularly the Financial Supervision Act (Wft) and Dutch Civil Code, sets out essential elements including the facility amount, interest rates, repayment terms, security requirements, and conditions precedent. It serves as both a formal offer of credit and, upon acceptance, a binding agreement between the parties, incorporating necessary regulatory requirements specific to the Dutch jurisdiction.

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What is a Credit Facility Letter?

The Credit Facility Letter is a fundamental document in Dutch banking practice, used when a financial institution agrees to provide credit facilities to a borrower. It serves as both an offer letter and, upon acceptance, the primary agreement governing the credit relationship. The document must comply with Dutch financial regulations, including the Financial Supervision Act (Wft) and Dutch Civil Code, while incorporating specific requirements for different types of borrowers (corporate or retail). The letter typically includes detailed terms about the facility, security requirements, conditions for drawdown, ongoing obligations, and events of default. It's particularly important in the Dutch context where financial regulations require clear documentation of credit arrangements and specific consumer protection measures where applicable. The document can be used for various types of credit facilities, including revolving credits, term loans, and overdraft facilities.

What sections should be included in a Credit Facility Letter?

1. Letter Header: Bank's letterhead, date, reference number, and addressee details

2. Salutation: Formal greeting to the borrower

3. Purpose Statement: Clear statement that this is an offer of credit facility

4. Facility Details: Type of facility, amount, currency, and purpose

5. Interest and Fees: Interest rate, calculation method, fees and charges

6. Availability Period: Period during which the facility can be drawn

7. Repayment Terms: Repayment schedule, method, and conditions

8. Security Requirements: Required collateral, guarantees, or other security arrangements

9. Key Conditions Precedent: Conditions that must be met before facility becomes available

10. Representations and Undertakings: Key promises and ongoing obligations of the borrower

11. Events of Default: Circumstances that would allow the bank to cancel the facility

12. Acceptance Instructions: How to accept the offer and deadline for acceptance

13. Closing and Signature: Bank's signature block and contact information

What sections are optional to include in a Credit Facility Letter?

1. Regulatory Disclosure: Required for consumer credit facilities, including APR and other mandatory disclosures under Dutch consumer protection laws

2. Foreign Exchange Provisions: Required when facility is in a currency other than EUR

3. Multi-Currency Options: Include when facility offers drawing in multiple currencies

4. Group Company Provisions: Required when facility extends to borrower's group companies

5. Financial Covenants: Include for corporate borrowers where financial ratios must be maintained

6. Security Trustee Provisions: Required in syndicated or club facilities with multiple lenders

What schedules should be included in a Credit Facility Letter?

1. Schedule 1 - Definitions: Detailed definitions of key terms used in the facility letter

2. Schedule 2 - Conditions Precedent: Detailed list of all required documents and conditions

3. Schedule 3 - Form of Drawdown Notice: Template for borrower to request drawings under the facility

4. Schedule 4 - Fee Schedule: Detailed breakdown of all applicable fees and charges

5. Schedule 5 - Security Documents: List and copies of required security documentation

6. Schedule 6 - Standard Terms and Conditions: Bank's standard terms and conditions applicable to the facility

7. Appendix A - Calculation Examples: Examples of interest calculations and fee computations

8. Appendix B - Compliance Certificate Template: Template for periodic compliance reporting if required

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Netherlands

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions




































Clauses




























Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Retail

Technology

Healthcare

Construction

Energy

Transportation

Agriculture

Telecommunications

Hospitality

Professional Services

Education

Infrastructure

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Banking

Credit Administration

Operations

Company Secretarial

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Banker

Relationship Manager

Credit Risk Manager

Legal Counsel

Compliance Officer

Financial Controller

Corporate Secretary

Banking Operations Manager

Credit Analyst

Risk Officer

Finance Manager

Managing Director

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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