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Loan Note Subscription Agreement

Loan Note Subscription Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Loan Note Subscription Agreement

"I need a Loan Note Subscription Agreement for my Dubai-based real estate development company to issue AED 50 million in secured loan notes to three institutional investors, with a maturity date of March 15, 2025, and quarterly interest payments."

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Document background
The Loan Note Subscription Agreement is a critical document used in the UAE for debt financing transactions where a company seeks to raise capital by issuing debt instruments. This agreement is particularly relevant in the UAE's growing debt capital markets and must comply with various federal laws and regulations, including UAE Federal Law No. 32 of 2021 (Commercial Companies Law) and relevant Central Bank and SCA regulations. The document sets out the complete commercial and legal relationship between the issuer and subscribers, including subscription mechanics, payment terms, interest provisions, and regulatory compliance requirements. It is commonly used for both conventional and Islamic finance structures, with appropriate modifications for Shariah compliance where required. The agreement needs to balance international best practices with local UAE legal requirements, making it a sophisticated instrument for capital raising in the region.
Suggested Sections

1. Parties: Identification of the Issuer, Subscriber(s), and any agents or trustees

2. Background: Context of the loan note issuance, purpose of the funding, and any relevant corporate approvals

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Subscription and Issue: Terms of subscription, commitment amounts, and conditions for issuance of the loan notes

5. Closing and Conditions Precedent: Requirements to be satisfied before closing and mechanics of completion

6. Payment Provisions: Terms for payment of subscription amount, interest, and any other amounts

7. Interest: Interest rate, calculation methods, payment dates, and default interest provisions

8. Repayment and Redemption: Terms for repayment of principal, early redemption rights, and mandatory redemption events

9. Representations and Warranties: Standard declarations by both Issuer and Subscribers

10. Covenants: Ongoing obligations of the Issuer and any financial covenants

11. Events of Default: Circumstances constituting default and consequences

12. Transferability: Provisions regarding transfer of loan notes and restrictions

13. Notices: Communication procedures between parties

14. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction provisions

Optional Sections

1. Security: Details of any security or guarantees - include if the loan notes are secured

2. Subordination: Required if the loan notes are subordinated to other debt

3. Note Trustee Provisions: Include if a trustee is appointed to represent noteholders

4. Tax Provisions: Detailed tax provisions if cross-border elements exist

5. Shariah Compliance: Include if the instrument needs to be Shariah-compliant

6. Multiple Subscribers: Special provisions for managing multiple subscribers and their relationships

7. Registration Rights: Include if notes may be converted to registered securities

8. Step-Up Provisions: Include if interest rate may increase upon certain triggers

Suggested Schedules

1. Form of Loan Note Certificate: Template of the physical or electronic note certificate

2. Commercial Terms: Detailed terms including amount, interest rate, maturity date

3. Conditions Precedent: Detailed list of required documents and conditions

4. Form of Transfer Certificate: Template for transferring notes between holders

5. Security Documents: If secured, details of security arrangements and documents

6. Financial Covenants: Detailed financial ratios and calculations

7. Know Your Customer Requirements: UAE regulatory compliance documentation requirements

8. Form of Compliance Certificate: Template for periodic compliance reporting

Authors

Alex Denne

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Aggregate Principal Amount
Business Day
Calculation Date
Certificate
Closing Date
Completion
Conditions Precedent
Default Interest Rate
Event of Default
Final Maturity Date
Financial Indebtedness
Interest Payment Date
Interest Period
Interest Rate
Issue Date
Issuer
Legal Representative
Loan Notes
Material Adverse Effect
Note Certificate
Noteholder
Payment Date
Permitted Security Interest
Principal Amount
Redemption Amount
Redemption Date
Register
Registrar
Regulatory Authority
Repayment Date
Security
Security Interest
Subscription Amount
Subscription Price
Subscriber
Subscription Date
Transaction Documents
Transfer Certificate
UAE Central Bank
UAE Dirham
Relevant Industries

Financial Services

Banking

Investment Management

Real Estate

Infrastructure

Energy

Healthcare

Technology

Manufacturing

Construction

Telecommunications

Hospitality

Retail

Transportation

Professional Services

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Finance

Investment Banking

Board Secretariat

Capital Markets

Corporate Development

Relevant Roles

Chief Financial Officer

Legal Counsel

Corporate Secretary

Finance Director

Treasury Manager

Investment Manager

Compliance Officer

Risk Manager

Corporate Finance Manager

Financial Controller

Board Director

Chief Executive Officer

Investment Banker

Bond Trader

Debt Capital Markets Associate

Strategic Finance Manager

Industries
UAE Federal Law No. 32 of 2021 (Commercial Companies Law): Governs corporate entities and their ability to issue debt instruments, including requirements for shareholder approval and corporate authority
UAE Federal Law No. 14 of 2018 (Central Bank Law): Regulates banking operations and financial activities, including the issuance of debt instruments and lending activities
SCA Board of Directors' Decision No. (3/R.M) of 2017: Concerning the Organization of Promoting and Introducing Regulations - relevant for the marketing and promotion of loan notes
UAE Federal Law No. 5 of 1985 (Civil Code): Provides the fundamental principles of contract law, including formation, validity, and enforcement of contracts
UAE Federal Law No. 18 of 1993 (Commercial Transactions Law): Governs commercial transactions and provides framework for commercial paper and debt instruments
UAE Federal Law No. 10 of 1980 (Central Bank Law): Sets out regulations regarding interest rates and banking operations
UAE Federal Law No. 4 of 2000 (Capital Markets Law): Regulates securities markets and trading of financial instruments
SCA Board Resolution No. 11 of 2016: Concerning the regulations of offering and issuing private bonds and sukuk, relevant for debt instrument issuance
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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