This brochure describes the development and use of the forms recommended by the AML in Europe for the benefit of those who are not yet familiar with the terms AML. It then describes the components of the AML Facility Agreements for use in Africa and highlights the main features of each model, as well as the main differences between these documents and the English legal documents on which the models for Africa are based. These documents (this term includes, where context permits, text, content, spreadsheets with macros and electronic interfaces, as well as underlying assumptions, transformations, formulas, algorithms, calculations and other mathematical and financial techniques) are provided to members of the Loan Market Association in accordance with the Bylaws of the Loan Market Association (a copy of these is available here), facilitate the documentation of transactions in credit markets. None of the Loan Market Association, Allen & Overy or Clifford Chance accepts any responsibility for the use of these materials or for any loss, damage or liability arising from such use. None of the members of the Loan Market Association, Allen & Overy or Clifford Chance have reviewed the laws of any jurisdiction that could apply to either party to an agreement using these documents and their subject matter. Members should therefore review all relevant legal, accounting and regulatory matters before using these documents or entering into a transaction between them and, where appropriate, consult with their professional advisors. Banks and borrowers may want to know that at Reed Smith, we have updated our standard bilateral facility agreement to include LMA wording and have managed to reach far under 162 pages! We have published a revised draft agreement on the trading system (revision without deferral); new draft agreement on the interchangeable device (revision with observation lag); revised commentary on collective agreements; Term sheet for collective agreements; and the terms of use of the RFR with supplement to the revised replacement of the screen rate language. The LMA has produced two collections of documents specifically for borrowers in some African jurisdictions, as well as a number of Loan Agreements under English law for borrowers in less developed economies in general. While the REF agreement does not preclude suppliers and their advisors from having to prepare customized documentation for each individual transaction, the LMA`s creation of a model agreement to cover real estate investment transactions will result in a more efficient use of time by advisors, allowing them to focus on transaction-specific negotiations. For this reason alone, the document is to be welcomed. We have published a note entitled “Documentary Implications of the End of the Brexit Transition Period for the Documentation of the LMA Facility” (“Brexit Note”), which consolidates and updates previous Brexit notes published in September 2016 and April 2019 and two tables on EU legislative references below.
The approach taken by the LMA in preparing the REF document was to base it as much as possible on existing LMA loan documents, in particular the Multi-Currency Facility Agreement (the “Existing LMA Facility”). As a result, many of the “standard” clauses of the existing AML facility – for example, gross tax provisions, remuneration and cost increases – have been included in the REF document. On the 16th. In April 2012, the Loan Market Association (the “LMA”) published its recommended form of facility agreement for real estate portfolio investment transactions (the “REF Document”). Describes key terms of LMA facility agreement templates developed for use in the African credit market Earlier this year, at the request of real estate finance market participants, the Loan Markets Association (LMA) launched its long-awaited Real Estate Finance Facility (REF) agreement. Previously, the AML documents on investment-grade and leveraged facilities were used as a core document, with participants adding any required property-specific regulations. As a result, however, documents were issued by suppliers with different standard real estate regulations, and negotiation deadlines were later extended. We are widely regarded as the body that sets guidelines for the EMEA syndicated credit market. These are broad in nature and concern both the primary and secondary markets. LMA documentation is created after extensive consultation with leading credit practitioners and law firms to provide a common view of documentation structures The document, which is approximately 162 pages long (in its syndicatable form), is likely to be too large for the majority of real estate financing transactions, which are often bilateral and one-sided.
The document must therefore be simplified in relation to these transactions. Some clauses are considered to be broader than they should be. The confidentiality clause, for example, goes too far. The Group that agreed with the document felt that it was better to have language and be available to be removed than not to have it from the beginning. The REF agreement also provides for a specific structure – typical of real estate investments. The parent company will set up borrowers who own real estate to whom the lender will present funds; Equity participation takes the form of common shares and downstream subordinated debt, both at the parent company level and in the borrowers; there are no provisions for mezzanine financing, but it is assumed that hedging will be concluded for adjusted financing (the REF agreement allows for both fixed and variable interest rates). the hedging consideration is a party to the document […].
