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SBLC Non Recourse Loan for Australia

SBLC Non Recourse Loan Template for Australia

This document establishes the terms and conditions for a non-recourse loan facility secured by a Standby Letter of Credit (SBLC) under Australian law. It details the loan structure where the lender's recourse is limited primarily to the SBLC as collateral, rather than the borrower's other assets. The agreement incorporates specific provisions compliant with Australian banking regulations, financial services laws, and security requirements, while establishing clear mechanisms for SBLC verification, loan disbursement, and enforcement rights in case of default.

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What is a SBLC Non Recourse Loan?

The SBLC Non-Recourse Loan agreement is utilized when a borrower seeks financing against a Standby Letter of Credit, with the lender's recourse limited primarily to the SBLC itself. This financing structure is particularly valuable for businesses seeking to leverage their banking instruments while limiting their broader liability exposure. The document must comply with Australian financial services regulations, including the Banking Act 1959 and ASIC requirements. It includes comprehensive provisions for SBLC verification, loan disbursement procedures, security arrangements, and enforcement mechanisms, while clearly establishing the non-recourse nature of the facility. This type of agreement is commonly used in international trade finance, project funding, and other commercial financing arrangements where SBLCs serve as the primary security.

What sections should be included in a SBLC Non Recourse Loan?

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

2. Background: Context of the transaction, including the SBLC's existence and the purpose of the loan

3. Definitions: Key terms used throughout the agreement, including SBLC-specific terminology

4. SBLC Verification and Requirements: Details of the SBLC, verification process, and conditions for acceptance

5. Loan Amount and Purpose: Specification of the loan amount, typically as a percentage of SBLC value, and permitted use

6. Non-Recourse Provisions: Clear statement of the non-recourse nature and limitations of borrower's liability

7. Conditions Precedent: Conditions that must be satisfied before the loan becomes effective

8. Security Arrangements: Details of the SBLC as security and any additional security requirements

9. Representations and Warranties: Standard and SBLC-specific representations by the borrower

10. Events of Default: Circumstances constituting default and consequences

11. Enforcement Rights: Lender's rights and limitations in case of default, specifically regarding the SBLC

12. Costs and Fees: All fees, charges, and cost allocations

13. Governing Law and Jurisdiction: Specification of Australian law and jurisdiction

What sections are optional to include in a SBLC Non Recourse Loan?

1. Bank Confirmation: Section for bank acknowledgment of the SBLC assignment, used when required by the issuing bank

2. Currency Provisions: Required for cross-border transactions where SBLC and loan are in different currencies

3. Insurance Requirements: Used when additional insurance coverage is required beyond the SBLC

4. Security Trustee Provisions: Required when a security trustee is appointed to manage the SBLC

5. Syndication Provisions: Included when multiple lenders are involved in the facility

6. Step-In Rights: Optional provisions for lender intervention rights in specific circumstances

What schedules should be included in a SBLC Non Recourse Loan?

1. SBLC Details: Copy and full details of the SBLC including issuing bank details

2. Fee Schedule: Detailed breakdown of all fees, charges, and commission structures

3. Conditions Precedent Documents: List of required documents and verifications

4. Form of Drawdown Notice: Template for loan drawdown requests

5. Form of SBLC Assignment: Template for SBLC assignment documentation

6. Verification Requirements: Detailed procedures for SBLC verification and authentication

7. Contact Details: Key contacts for all parties and authorized signatories

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Australia

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions



















































Clauses

































Relevant Industries

Banking and Financial Services

International Trade

Commercial Real Estate

Infrastructure Development

Manufacturing

Energy and Resources

Construction

Import/Export

Wholesale Trade

Project Finance

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Trade Finance

Corporate Finance

Credit

Commercial Operations

Banking Relations

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Commercial Director

Risk Manager

Credit Manager

Trade Finance Manager

Banking Relationship Manager

Compliance Officer

Corporate Finance Manager

Financial Controller

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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