# Specialist reference: loan and facility agreements

Load this reference when the contract being reviewed is a bilateral or syndicated loan, revolving or term facility, acquisition-finance facility, refinancing, or facility amendment. It supplements, and does not replace, the base contract-reviewer method — run the base structural map, defined-terms sweep, boilerplate read, grading scale, and output sections as normal, and apply the steps below in addition when working through the risk-allocation, exit, and money sections.

Review from the instructed party's perspective while showing how provisions interact across the finance documents. Recalculate economics rather than relying on headings or term-sheet labels.

## Additional required inputs

Review side, objectives, risk tolerance and governing law; draft facility, term sheet, fee letters and existing debt documents; borrower and guarantor group, ownership, purpose and transaction structure; facility amount, currency, tenor, amortisation, pricing and hedging; financial model, accounts, projections and covenant definitions; security, guarantees, intercreditor terms and existing indebtedness; regulatory, tax, sanctions, licensing and disclosure constraints.

## Additional method

1. **Build the term map.** Reconcile facility type, commitments, availability, purpose, currency, repayment, cancellation, prepayment, interest, margin, fees and break costs against the term sheet.
2. **Recalculate economics.** Test day count, compounding, benchmark replacement, floors, default rate, gross-up, increased costs and payment waterfall with examples — do not rely on the document's own labels or the term sheet's headline numbers.
3. **Review utilisation controls.** Test conditions precedent, drawdown mechanics, repeated conditions, documentary discretion and consequences of unmet conditions.
4. **Test representations.** Check scope, materiality, knowledge, repetition, disclosure, deemed repetition and group coverage against diligence and actual facts.
5. **Test undertakings.** Analyse information, financial, operational, negative pledge, disposals, debt, distributions, acquisitions, sanctions and ESG covenants. Identify consent baskets, thresholds and cure mechanics.
6. **Test defaults.** Review non-payment, covenant breach, misrepresentation, cross-default, insolvency, judgment, cessation, audit qualification, change of control and material-adverse-effect triggers. Check grace, materiality and acceleration mechanics.
7. **Review lender powers.** Examine discretion, majority decisions, agent protections, amendments, pro rata sharing, set-off, transfers, sub-participations, disclosure and confidentiality.
8. **Integrate credit support.** Confirm guaranteed and secured obligations, security coverage, perfection, ranking, intercreditor controls and release conditions.
9. **Model exits and stress cases.** Test voluntary and mandatory prepayment, refinancing, asset sales, enforcement, illegality, tax change and benchmark disruption.

## Additional output

Add to the base output: an economics schedule (with worked examples of the recalculated figures), a covenant and basket model, a default-trigger map, a conditions-precedent checklist, and a document-interaction matrix showing how the facility agreement, fee letters, security documents, and intercreditor agreement qualify each other.

## Additional guardrails

- Do not invent commercial approval, financial headroom, compliance, or enforceability.
- Do not hide fees, compounding, lender discretion, or acceleration risk in summaries — surface them even when the drafting buries them.
- Distinguish a drafting issue from a credit, accounting, tax, regulatory, or financial-model risk; flag the latter for the appropriate specialist rather than resolving it as if it were a drafting question.
- Flag consumer, small-business, sanctions, anti-money-laundering, and data-transfer controls where applicable.
- Require local finance counsel and financial-model review before execution; this reference does not substitute for either.