Loan Participation Agreement Template for Ireland

The Loan Participation Agreement is a critical document used in financial markets when a lender wishes to transfer an economic interest in a loan while maintaining the direct lending relationship with the borrower. This agreement type is particularly relevant in the Irish financial services sector, where it must comply with both domestic Irish law and EU regulations. It is commonly used for risk sharing, regulatory capital management, and portfolio diversification purposes. The document typically includes detailed provisions on payment mechanisms, risk allocation, information rights, and regulatory compliance requirements. The agreement structure allows financial institutions to manage their loan exposure while providing investment opportunities to participants, all within the framework of Irish financial services regulation. The Loan Participation Agreement must be carefully drafted to ensure it meets regulatory requirements while effectively documenting the commercial arrangement between the parties.

1. Parties: Identifies the grantor (original lender) and the participant(s)

2. Background: Describes the underlying loan agreement and the grantor's intention to grant a participation to the participant

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation principles

4. Participation: Details the nature and extent of the participation, including participation percentage and effective date

5. Purchase Price and Payment: Specifies the purchase price for the participation and payment terms

6. Payments and Distributions: Sets out mechanisms for sharing payments received from the borrower and the timing of distributions

7. Rights and Obligations of the Parties: Defines the respective rights and obligations of the grantor and participant

8. Administration of the Underlying Loan: Establishes the grantor's role in managing the underlying loan and any consultation rights of the participant

9. Representations and Warranties: Contains representations and warranties given by both parties

10. Information Rights: Details the participant's rights to receive information about the underlying loan and borrower

11. Transfer and Assignment: Governs the ability to transfer or assign rights under the participation agreement

12. Confidentiality: Contains confidentiality obligations regarding the agreement and borrower information

13. Termination: Sets out circumstances and process for terminating the participation

14. Governing Law and Jurisdiction: Specifies Irish law as governing law and jurisdiction for disputes