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Loan Note Template for New Zealand

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Key Requirements PROMPT example:

Loan Note

"I need a Loan Note governed by New Zealand law for a NZD 2 million corporate loan from ABC Investment Ltd to XYZ Tech Solutions Ltd, with 8% annual interest rate and quarterly repayments starting March 2025."

Document background
The Loan Note is a fundamental financing instrument used in New Zealand to document debt obligations and lending arrangements. It serves as evidence of debt and outlines the terms under which a borrower agrees to repay a lender, including the principal amount, interest rates, payment schedules, and any security arrangements. This document type is commonly used in various contexts, from corporate financing to private lending arrangements, and must comply with New Zealand's financial markets legislation, particularly the Financial Markets Conduct Act 2013. The Loan Note can be either secured or unsecured, may include conversion rights, and can be structured to accommodate various commercial requirements while ensuring legal enforceability. It's particularly useful when formal documentation of debt terms is required, especially in situations involving substantial sums or complex repayment arrangements.
Suggested Sections

1. Parties: Identifies the lender and borrower with full legal names and addresses

2. Background: Sets out the context of the loan note and intention of the parties

3. Definitions and Interpretation: Defines key terms used in the document and sets out interpretation rules

4. Subscription and Issue: Details the agreement to subscribe for and issue the loan note

5. Principal Amount: Specifies the principal amount of the loan

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

7. Repayment Terms: Specifies when and how the principal amount will be repaid

8. Payment Provisions: Details the mechanics of payments, including payment method and currency

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

10. Events of Default: Lists circumstances that constitute default and consequences

11. Rights and Remedies: Sets out the rights of the lender upon default

12. Transferability: Provisions regarding transfer or assignment of the loan note

13. Notices: Specifies how formal notices must be given between parties

14. General Provisions: Standard boilerplate provisions including governing law and jurisdiction

Optional Sections

1. Security: Include if the loan note is secured against assets

2. Guarantee: Include if there is a guarantor for the loan

3. Conversion Rights: Include if the loan note can be converted to equity

4. Subordination: Include if the loan note is subordinated to other debt

5. Tax Provisions: Include detailed tax provisions if cross-border or complex tax implications

6. Financial Covenants: Include if specific financial metrics must be maintained

7. Information Rights: Include if lender requires specific reporting or information rights

8. Early Repayment: Include if early repayment is permitted and any associated terms

Suggested Schedules

1. Schedule 1 - Form of Note Certificate: The formal certificate representing the loan note

2. Schedule 2 - Repayment Schedule: Detailed schedule of repayment dates and amounts

3. Schedule 3 - Calculation of Interest: Detailed methodology for interest calculations

4. Schedule 4 - Form of Transfer: Standard form for transferring the note to another holder

5. Schedule 5 - Security Details: Details of any security granted (if applicable)

6. Appendix A - Conditions Precedent: List of conditions to be satisfied before the note is issued

7. Appendix B - Permitted Security Interests: List of security interests permitted to exist (if applicable)

Authors

Alex Denne

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

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Relevant Industries

Financial Services

Banking

Private Equity

Investment Management

Real Estate

Infrastructure

Manufacturing

Technology

Retail

Healthcare

Agriculture

Mining

Construction

Professional Services

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Development

Investment

Credit

Company Secretariat

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Financial Controller

Investment Manager

Corporate Lawyer

Legal Counsel

Compliance Officer

Risk Manager

Credit Manager

Investment Banker

Fund Manager

Company Secretary

Commercial Director

Banking Relationship 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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