信贷融资合同英.docx

1、信贷融资合同英Document InformationDocument NameCredit & Finance Drafting ConsiderationsChapterCredit & FinanceLanguage This document was originally drafted in Chinese.DisclaimerWhile reasonable care is taken to ensure the accuracy and completeness of the publication, The Chapter Editor makes any representa

2、tions or warranties, express or implied, that the publication is free from errors or omissions. This document is based upon the Editors experience only, and should be used for general reference purposes only. Specific and detailed professional advice should always be obtained in relation to any prop

3、osed legal agreement. This document should not be relied upon as a substitute for legal or other professional advice.Document Number CC01Release Number and DateRelease 3 December 2008credit aND finance drafting considerations 1. introductionThis chapter is concerned with a variety of aspects of borr

4、owing and lending and includes a range of documentation from basic lender commitments to security and guarantees. With the exception of Document 4 “Loan Agreement Short Form” (which does not contain standard representations and warranties and performance covenants) and Document 7 “Comfort Letter”, t

5、he documents are prepared from the perspective of protection and preservation of the rights of the lender and not of the borrower.The documentation may be modified for use in connection with direct foreign currency loans or foreign exchange loans in the PRC. Where PRC law applies to the transaction,

6、 specific regard should be had to the various legislation in China relating to borrowing and lending.2. Relevant legislation and regulationsIn entering into any contracts in the PRC, the parties should, of course, have regard to terms of the Contract Law of the Peoples Republic of China. Of particul

7、ar significance in the PRC Contract Law is Article 12, which permits the content of a contract to be determined, for the most part, by the parties to it. Also significant is Article 126, which provides that parties to a “foreign-related contract” may choose those laws applicable to the settlement of

8、 contact disputes arising from the contract unless otherwise stipulated by law. Importantly, however, Article 123 affirms the principle that where other PRC laws stipulate otherwise on contracts, the provisions of those laws shall prevail.Accordingly, it is important to consider all PRC legislation

9、possibly impacting on the instrument in question to ensure that form and, where applicable, registration requirements, of the law have been complied with.In the following document descriptions, the following legislation is discussed and emphasised: The Contract Law of the Peoples Republic of China (

10、adopted at the Second Session of the Ninth National Peoples Congress on 15 March 1999) the “Contract Law”; The Commercial Banking Law of the Peoples Republic of China, 1995 (adopted at the Thirteenth Session of the Standing Committee of the Eight National Peoples Congress on 10 May 1995; promulgated

11、 by Order No. 47 on 10 May 1995) the “Banking Law”; and The PRC Security Law (adopted at the Fourteenth Session of the Standing Committee of the Eighth National Peoples Congress and promulgated on 30 June 1995; effective as of 1 October 1995) the “Security Law”.Of this legislation, the PRC Security

12、Law in particular has paved the way for a variety of different forms of lending instruments by which financial institutions can secure monies owing to them and manage the attendant risks in connection with loans granted by them.You should also be aware of the “Foreign Debt Administration Tentative P

13、rocedures” which came into effect on 1 March 2003. These provide a general code with respect to foreign borrowing including by both sovereign and non-sovereign entities. The procedures include guidelines concerning how generally foreign funding is to be used including, at Article 23, a statement tha

14、t foreign debt funds are to be used mainly for economic development and structure adjustments of the balance of foreign debts. Also importantly, Article 40 provides that where a domestic institution that borrows foreign funds or has provided external security for it fails to obtain the required appr

15、ovals, any external lending contract or security contract executed is deemed not to have any legal binding effect.Finally, a cautionary note. The types of financing facilities available and law and regulation relating to them are constantly expanding and being revised in the PRC. Accordingly, practi

16、tioners should be aware of and concern themselves with any changes in such laws as they occur.3. document introductions The model contracts in the chapter are described below. Included for the more substantial contracts is a discussion of the fact pattern, assumptions and key provisions of the contr

17、acts. 3.1 Commitment Letter Additional Facility (CC02)This precedent commitment letter and accompanying term sheet contemplates provision of an additional loan facility, specifically a non-revolving credit facility, pursuant to an existing loan contract.The precedent can be modified for use for a nu

18、mber of currencies and for a number of purposes. Included in the term sheet is provision for bankers acceptances and documentary credits which are discussed in greater detail under the document description for Item 5 “Loan Agreement Long Form”. 3.2 Commitment Letter Long Form (CC03)This precedent co

19、ntemplates funding for an acquisition financing and offers a range of facilities, specifically an unspecified currency loan facility and U.S. Dollar term loan facility, combined with an acquisition of an equity interest in the borrower, as may occur with many substantial project loans. The commitmen

20、t letter also contemplates a number of co-arrangers.The covenants contained in this commitment are sophisticated and unlikely to suit every circumstance, even in the context of a “standard” project loan. In addition, certain restrictions related to the granting of such loans by foreign parties may a

21、pply. These are more fully spelled out in the document descriptions for Item 4 “Loan Agreement Short Form” and Item 5 “Loan Agreement Long Form” below.3.3 Loan Agreement & Promissory Note Short Form (CC04)This simple form of loan agreement is representative of those often-used in lending transaction

22、s in China. It contemplates a basic form of term loan denominated in U.S. Dollars. The agreement may be significantly deficient from a lenders point of view as it lacks representations and warranties and performance covenants other than default from non-payment.Under PRC law, the parties must have r

23、egard for the Banking Law, which introduces some form requirements into lending transactions. Specifically, under Article 37 of the Banking Law, commercial banks in making loans are required to enter into written lending contracts. Such contracts must stipulate the type, purpose, amount and interest

24、 rate of the loan, any repayment terms, the method of repayment, liability for breach of contract and other matters deemed necessary by the parties. Outside of the ambit of these formal requirements, the parties are allowed a great deal of leeway in their contracts. As regards interest, however, the

25、y should have regard to Article 38 of the Banking Law which stipulates that banks may determine loan interest rates within upper and lower limits specified by the Peoples Bank of China (the “PBOC”). The Provisional Regulations on Interest Rate Control promulgated on 11 December 1990 by the PBOC give

26、 the bank a wide scope in determining such rates from time to time, including penalty interest rates. In addition to the form requirements provided in the Banking Law, foreign exchange loans are subject to certain additional foreign debt registration requirements which are, for the most part, contai

27、ned in the “Tentative Provisions of the State Administration of Foreign Exchanges (SAFE) Monitoring of Foreign Debts Statistics” (the “Debt Registration Regulations”) and the Foreign Exchange Control Regulations.Under the Debt Registration Regulations and their Implementation Rules, banks are prohib

28、ited from opening a foreign exchange account or debt servicing account for a borrower unless that borrower has obtained a Foreign Debt Registration Certificate. In the absence of such certificate, no payments of principal or interest can be remitted abroad.SAFE has issued an opinion on the implement

29、ation of its guidelines and circulars relating to registration (Opinion on The Implementation of the “Further Strengthening the Monitoring of Foreign Debts Statistics Circular”). This opinion provides specific rules relating to the requirements for Chinese language versions of loan contracts and als

30、o provides that a loan agreement subject to foreign debt registration must contain the following provision:“After the signing of the loan agreement, the borrower shall undertake foreign debt registration procedures at the SAFE in accordance with the requirements under Article 24 of Chapter 3 of the

31、PRC Foreign Exchange Control Regulations promulgated on 29 January 1996. The registration document issued by SAFE shall be one of the essential legal documents for the loan agreement.”3.4 Loan Agreement Long Form (CC05)In considering this precedent, in addition to the specifics relating to the subje

32、ct lending transaction, you should consider the form and registration requirements regarding foreign exchange loans discussed in the document description for Item 4 “Loan Agreement Short Form”. Not all of the facilities contemplated here may be available in a purely PRC-based loan.This agreement is drafted from a Lenders perspective. The Borrower has three different methods for obtaining credit under these facilities: (i) loan advances, (ii) bankers acceptances, and (iii) documentary credits. The Borrower agrees to give the Lender security over all its