Standby Credit Agreement Template for New Zealand

This document type is essential for establishing contingent credit arrangements in the New Zealand market. A Standby Credit Agreement is typically used when a company needs a backup source of liquidity or requires support for specific business operations, such as working capital or project financing. The agreement is structured to comply with New Zealand banking regulations and commercial law, including the Contract and Commercial Law Act 2017, the Reserve Bank of New Zealand Act 2021, and relevant financial sector legislation. It provides comprehensive coverage of facility terms, drawdown mechanics, conditions precedent, representations, warranties, and events of default. The document is particularly relevant in scenarios where businesses need readily available but undrawn credit facilities to support their operations or meet regulatory requirements. It can be adapted for various business purposes while maintaining compliance with New Zealand legal and regulatory frameworks.

1. Parties: Identification of the credit provider (typically a bank or financial institution) and the beneficiary

2. Background: Context of the standby credit arrangement, including the underlying transaction or relationship

3. Definitions: Key terms used throughout the agreement, including banking and finance-specific terminology

4. Facility Details: Specific details of the standby credit facility, including amount, currency, and availability period

5. Conditions Precedent: Conditions that must be satisfied before the facility becomes available

6. Drawing and Utilization: Procedures and requirements for drawing under the standby credit

7. Fees and Charges: All applicable fees, including establishment fees, commitment fees, and utilization fees

8. Representations and Warranties: Statements of fact and assurances given by the parties

9. Undertakings: Ongoing obligations of the parties during the term of the facility

10. Events of Default: Circumstances that would constitute a default and trigger remedial actions

11. Payments and Calculations: Payment mechanics, calculation methods, and currency provisions

12. Changes to Parties: Rules regarding assignment, transfer, and novation

13. Administration: Administrative provisions including notices and calculations

14. Governing Law and Jurisdiction: Specification of New Zealand law and jurisdiction provisions

15. Execution: Signature blocks and execution formalities