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Drawdown Loan Agreement for Philippines

Drawdown Loan Agreement Template for Philippines

A comprehensive legal agreement governed by Philippine law that establishes the terms and conditions under which a lender provides a loan facility to a borrower with multiple drawdown options. The agreement details the drawdown mechanics, interest calculations, repayment terms, conditions precedent, representations and warranties, covenants, and events of default. It incorporates specific requirements under Philippine banking regulations, including the Truth in Lending Act and relevant Central Bank circulars, while providing flexibility for the borrower to draw funds as needed within the facility limit.

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What is a Drawdown Loan Agreement?

The Drawdown Loan Agreement is a crucial financing document used when a borrower requires flexible access to funds over time rather than a single lump-sum loan. This agreement type is common in the Philippines for project financing, working capital facilities, and corporate expansion purposes. It enables borrowers to draw funds multiple times up to a predetermined limit, paying interest only on the amount drawn. The document must comply with Philippine banking regulations, including the New Central Bank Act and Truth in Lending Act, while incorporating necessary safeguards for lenders. It's particularly useful for businesses with phased funding needs or irregular cash flow patterns, providing a more flexible alternative to traditional term loans.

What sections should be included in a Drawdown Loan Agreement?

1. Parties: Identifies the lender and borrower with their complete legal details

2. Background: Outlines the context of the loan agreement and purpose of the facility

3. Definitions and Interpretation: Defines key terms and establishes interpretation rules for the agreement

4. The Facility: Details the loan amount, purpose, and availability period

5. Drawdown Conditions and Procedure: Specifies conditions precedent and the process for requesting drawdowns

6. Interest and Fees: Sets out interest rates, calculation methods, and all applicable fees

7. Repayment and Prepayment: Details repayment schedule, prepayment terms, and related conditions

8. Representations and Warranties: Lists borrower's confirmations about their legal and financial status

9. Covenants: Specifies positive and negative obligations of the borrower during the loan term

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

11. Changes to Parties: Provisions regarding assignment and transfer rights

12. Administration: Covers notices, calculations, and other administrative matters

13. Governing Law and Enforcement: Specifies Philippine law as governing law and enforcement provisions

What sections are optional to include in a Drawdown Loan Agreement?

1. Security: Required if the loan is secured - details the security structure and enforcement

2. Guarantee: Required if there are guarantors to the loan

3. Increased Costs and Tax Gross-Up: Include for sophisticated borrowers or where tax implications are significant

4. Market Disruption: Include for floating rate loans to address market disruption scenarios

5. Multiple Drawdown Provisions: Include if multiple drawdowns are permitted with specific conditions

6. Currency Provisions: Required if loan or repayments involve multiple currencies

7. Anti-Money Laundering Provisions: Enhanced provisions required for high-risk borrowers or large facilities

What schedules should be included in a Drawdown Loan Agreement?

1. Schedule 1 - Conditions Precedent: List of all documents and conditions required before first drawdown

2. Schedule 2 - Form of Drawdown Request: Template for borrower to request loan drawdowns

3. Schedule 3 - Repayment Schedule: Detailed amortization or repayment schedule if applicable

4. Schedule 4 - Form of Compliance Certificate: Template for periodic compliance certification by borrower

5. Schedule 5 - Calculation of Interest Rate: Detailed methodology for interest calculation if complex

6. Schedule 6 - Security Documents: List and copies of security documents if loan is secured

7. Schedule 7 - Permitted Security: List of security interests permitted to exist

8. Appendix A - Contact Details: Contact information for all parties for notices and communications

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

Philippines

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions















































Clauses

































Relevant Industries

Banking and Financial Services

Real Estate and Construction

Manufacturing

Agriculture

Energy and Utilities

Infrastructure

Technology

Healthcare

Retail and Consumer Goods

Transportation and Logistics

Mining and Natural Resources

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit

Operations

Business Development

Project Finance

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Compliance Officer

Credit Risk Manager

Relationship Manager

Loan Officer

Corporate Banking Manager

Finance Manager

Business Development Manager

Project Finance Manager

Contract Administrator

Risk Officer

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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