The purpose of this guide is to provide an overview of the key safeguards in an LMA Facility Agreement and to assist agents, arrangers, lenders and those who agree on credit documentation to identify the standard safeguards that an agent would expect under a loan agreement. The forms of facility agreements for investment-grade borrowers recommended by it, the Investment Quality Agreements (IGAs), were the first primary documents of the Loan Market Association (LMA) and are probably the most widely used. “It`s LMA” is the preferred justification of all bank lawyers for a negotiating position, and UK banks are increasingly asking their lawyers to prepare installation agreements in LMA format. But what is the “LMA”? The Loan Market Association (LMA) publishes two types of recommended forms of facility agreements: investment-grade financing and leveraged financing (LF). As Adam Pierce explains, some details are only included in the LF agreement and should be included in the installation agreements, regardless of the nature of the transaction. The impact that Brexit may have on the financial sector and therefore on the credit market is the risk factor that has probably received the most attention from credit market participants over the past 12 months, although the general conclusion in most cases is that no changes to the documentation conditions are necessary at this time. The LMA has updated its LF agreement more frequently than its investment grade agreements in recent years. Some of these changes are simply specific to funding. But the LMA also seems interested in keeping investment quality agreements simple as much as possible, and more willing to make changes to the LF agreement. Add the words “intention of the guarantor” to the guarantee clause. It can be difficult for lenders to execute collateral if the terms of the underlying loan are subsequently changed without the guarantor`s consent. However, a lender may be in a better position if it can demonstrate that the guarantor and the lender were considering the appropriate type of change at the time of the guarantee.

The term “guarantor`s intention” in the UAA Agreement attempts to remedy this. Definitions of “material adverse effects” and added in the change of control clause for “control” and “acting together”. The definitions of investment grade agreements are empty. Definitions of these terms in the UAA agreement (which are not new) may not always be appropriate and often need to be simplified when used outside of debt financing. However, they are a useful starting point. The prospect of a Brexit may have had a minimal impact on credit documentation so far, but its impact on foreign exchange markets is in some cases discussed in documentary discussions. The objective of this guide is to provide an overview of the role of the secondary market in the syndicated loan market and to identify, among other things, the participants operating in the secondary credit market, the types of debt available, a typical anatomy of a transaction and the different transfer mechanisms. The collection of the recommended forms of association forms the basis or at least has an influence on virtually all trade credit documents, certainly in the market of English law.

The LMA`s approach to updating its facility agreements Last month, the Association of Corporate Treasurers (ACT) released a fifth edition of its Loan Market Association`s Borrower Guide to Investment Quality Agreements. The Guide for Borrowers has been extensively revised and updated to reflect changes to agreements and other market developments since the last edition in 2013. The objective of this document is to provide guidance on syndicated and leveraged credit transactions and to identify, inter alia, the types of facilities commonly observed in the credit market, the parties to a typical credit agreement and the common methods used by lenders to transfer credit holdings. For example, the parties may decide to include or exclude the effects of an intraday revaluation of the relevant benchmark for the purposes of the agreement and receive a selection of rescue rates to be applied where the screen rate is not available. As such, they constitute a basis for the mechanical aspects of credit documentation and a starting point for the commercial aspects that can be applied in most sectors of the credit market. Under the market disturbance clause, in the event of a market disruption, each lender`s actual financing costs are used to calculate the interest rate on its loans instead of LIBOR. Include a “LIBOR floor” in this clause so that no lender suffers from this clause if its financing costs are lower than LIBOR. The uaA agreement now contains this lower limit. Home > Blog > Is the use of an LMA loan agreement comparable to that of standard written terms? These documents (the term of which includes, where context permits, text, content, spreadsheets with macros and electronic interfaces, as well as underlying assumptions, conversions, 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 which 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 any use for which these materials may be used or for any loss, damage or liability arising from such use.

None of the Loan Market Association, Allen & Overy or Clifford Chance has reviewed the laws of any jurisdiction that may 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 under these documents and, where appropriate, consult with their professional advisors. We have published a revised draft agreement on the rate change scheme (review without change of observation); new agreement on the change of issue agreement (revision with deferral of observation); revised comments on the agreements on the tariff change mechanism; Term sheet for collective agreements; and the RFR Terms of Use with Supplement to the Revised Screen Frequency Language Replacement. Should a contractual floor of zero be set on Libor, Euribor or any other benchmark applicable for the purposes of the agreement? The commercial point here is whether lenders or the borrower (due to a margin reduction) should benefit from a negative reference rate. If you have a revolving facility, include the compensation provisions in the refund section. Revolving loans have a term of only one interest period. Thus, at the end of each interest period, the borrower will usually want to partially or totally refinance their existing revolving loans by drawing on new loans. In practice, lenders or borrowers simply make a net payment to the extent that the outstanding amount of revolving loans increases or decreases.

Since June 2009, the LF agreement recognizes that lenders and borrowers only have to make these net payments. The AML documentation will be prepared after extensive consultations with leading credit practitioners and law firms to provide an agreed common view of documentation structures On April 16, 2012, the Loan Market Association (the “LMA”) published its recommended form of Facility Agreement for Real Estate Portfolio Investment Transactions (the “REF Document”). The Loan Management Account (LMA Account®®) offered by Bank of America is a flexible line of credit that can be used for almost any purpose. Whether you want to help a family member, renovate your kitchen, pay taxes, or cover education costs, an LMA account can help. With an LMA account, you can generate cash, consolidate other outstanding loans if you wish, and get a clearer picture of your balance sheet. .