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Credit Facility Agreement for New Zealand

Credit Facility Agreement Template for New Zealand

A comprehensive legal agreement governed by New Zealand law that establishes the terms and conditions under which a lender provides credit facilities to a borrower. The document incorporates requirements from the Credit Contracts and Consumer Finance Act 2003 and other relevant New Zealand legislation, detailing the facility amount, purpose, interest rates, repayment terms, security arrangements, representations and warranties, and events of default. It provides a legally binding framework for the credit relationship while ensuring compliance with New Zealand's financial services regulations and consumer protection requirements.

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What is a Credit Facility Agreement?

The Credit Facility Agreement is a fundamental financing document used in New Zealand's financial services sector when a lender extends credit to a borrower. It is particularly crucial for businesses seeking working capital, expansion financing, or project funding. The agreement must comply with New Zealand's regulatory framework, including the Credit Contracts and Consumer Finance Act 2003, Financial Markets Conduct Act 2013, and related legislation. This document typically includes detailed provisions on facility limits, drawdown mechanisms, interest calculations, security arrangements, and borrower obligations. It serves as the primary document governing the lending relationship and provides legal protection for all parties involved while ensuring regulatory compliance.

What sections should be included in a Credit Facility Agreement?

1. Parties: Identification of the lender and borrower(s), including registration numbers and addresses

2. Background: Context of the facility and purpose of the agreement

3. Definitions and Interpretation: Defined terms, rules of interpretation, and currency conventions

4. The Facility: Nature, purpose, and amount of the facility, including availability period

5. Conditions Precedent: Conditions that must be satisfied before drawdown

6. Drawdown: Process and requirements for drawing down the facility

7. Interest and Fees: Interest calculation, payment dates, default interest, and applicable fees

8. Repayment: Repayment terms, scheduled payments, and prepayment provisions

9. Representations and Warranties: Borrower's confirmations about their legal and financial status

10. Undertakings: Ongoing obligations of the borrower during the facility term

11. Events of Default: Circumstances constituting default and consequences

12. General Provisions: Assignment, notices, amendments, governing law, and enforcement

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

1. Security: Include when the facility is secured, detailing the security structure and enforcement rights

2. Guarantees: Include when third-party guarantees are required for the facility

3. Multiple Borrowers: Include for joint borrowers or corporate group borrowing arrangements

4. Market Disruption: Include for facilities with variable interest rates to address market disruption events

5. Increased Costs: Include for longer-term facilities to address regulatory changes affecting the lender's costs

6. Set-off Rights: Include when the lender requires explicit set-off rights against borrower accounts

7. Review Events: Include for facilities requiring periodic review of terms or borrower circumstances

8. Financial Covenants: Include when specific financial metrics must be maintained by the borrower

What schedules should be included in a Credit Facility Agreement?

1. Facility Terms: Detailed commercial terms including facility limits, interest rates, and fees

2. Conditions Precedent: Detailed list of required documents and conditions for drawdown

3. Drawdown Notice: Form of notice required for drawing down the facility

4. Compliance Certificate: Template for periodic confirmation of compliance with facility terms

5. Calculation of Interest and Fees: Detailed methodology for calculating interest and fees

6. Security Details: Description of security assets and registration requirements

7. Permitted Security Interests: List of security interests permitted under the facility

8. Form of Transfer Certificate: Template for transferring rights under the facility

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

New Zealand

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions


















































Clauses






























Relevant Industries

Banking and Financial Services

Corporate Finance

Real Estate and Property

Manufacturing

Retail

Agriculture

Technology and Software

Healthcare

Construction

Energy and Utilities

Transportation and Logistics

Professional Services

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Credit

Corporate Banking

Commercial Banking

Operations

Company Secretariat

Business Development

Transaction Banking

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Risk Manager

Credit Manager

Relationship Manager

Compliance Officer

Financial Controller

Banking Executive

Corporate Secretary

Senior Finance Manager

Credit Analyst

Legal Director

Managing Director

Finance Manager

Commercial Manager

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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