Debt Facility Agreement Template for South Africa

The Debt Facility Agreement serves as the primary document governing lending relationships in South African financing transactions. It is commonly used when a lender (typically a bank or financial institution) provides debt financing to a borrower for various purposes such as working capital, acquisition financing, project development, or asset purchases. The agreement must comply with South African legislation, particularly the National Credit Act, Companies Act, and Financial Sector Regulation Act. It includes comprehensive provisions covering facility terms, security arrangements, conditions for drawdown, repayment obligations, and lender protections. This document type is essential for both bilateral and syndicated lending arrangements and can be adapted for different financing structures while maintaining compliance with South African regulatory requirements.

1. Parties: Identification of the lender(s), borrower(s), and any guarantors or security providers

2. Background: Context of the facility, purpose of the loan, and general commercial intent of the parties

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

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

5. Conditions Precedent: Conditions that must be satisfied before drawdown is permitted

6. Drawdown: Procedures and requirements for requesting and making drawdowns

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

8. Repayment: Terms of repayment including scheduled payments and final maturity

9. Prepayment: Voluntary and mandatory prepayment provisions

10. Fees: All applicable fees including arrangement fees, commitment fees, and break costs

11. Tax Provisions: Treatment of taxes, withholding requirements, and gross-up provisions

12. Representations and Warranties: Statements of fact and assurances given by the borrower

13. Undertakings: Positive and negative obligations of the borrower during the facility term

14. Events of Default: Circumstances constituting default and their consequences

15. Changes to Parties: Rules regarding assignment, transfer, and syndication

16. Administration: Payment mechanics, calculations, and notices

17. Governing Law and Jurisdiction: Choice of South African law and jurisdiction provisions

18. Execution: Signature blocks and execution formalities