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Loan Note Agreement for Switzerland

Loan Note Agreement Template for Switzerland

A Loan Note Agreement under Swiss law is a sophisticated financial instrument that documents the terms and conditions of a debt obligation between an issuer and noteholders. This agreement, governed by Swiss law (particularly the Code of Obligations), establishes the framework for the issuance of loan notes, including interest rates, repayment terms, security arrangements, and noteholder rights. It incorporates specific Swiss legal requirements while maintaining flexibility for international transactions, making it suitable for both domestic and cross-border financing arrangements. The document includes detailed provisions for note issuance, transfer mechanisms, covenant packages, and enforcement rights.

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What is a Loan Note Agreement?

The Loan Note Agreement serves as a key financing instrument in Swiss business practice, commonly used for raising debt capital through the issuance of loan notes. This document type is particularly relevant when companies seek to structure their borrowing in a format that can be easily transferred or traded, while benefiting from the stability and predictability of Swiss law. The agreement typically combines elements of traditional loan documentation with features of debt securities, making it suitable for both bilateral and syndicated arrangements. Under Swiss law, these agreements must comply with specific requirements of the Code of Obligations (OR) regarding loan contracts and securities, while also considering financial market regulations when the notes are intended for broader distribution. The document provides comprehensive coverage of all aspects of the lending relationship, from issuance and interest calculations to enforcement rights and security arrangements.

What sections should be included in a Loan Note Agreement?

1. Parties: Identification of the lender(s) and borrower(s) with full legal names and addresses

2. Background: Context of the loan arrangement and purpose of the agreement

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

4. The Notes: Description of the loan notes, including principal amount, denomination, and form

5. Issue of Notes: Terms and conditions for the issuance of the notes, including issue date and procedures

6. Status and Ranking: Status of the notes and their ranking in terms of priority of payment

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

8. Repayment and Redemption: Terms for repayment of principal, early redemption rights, and mandatory redemption events

9. Payments: Payment mechanics, currency, business day conventions, and payment procedures

10. Taxation: Tax treatment of payments and gross-up provisions

11. Events of Default: List of events triggering default and consequences thereof

12. Representations and Warranties: Standard representations and warranties given by the borrower

13. Covenants: Positive and negative obligations of the borrower during the loan term

14. Transfers and Assignment: Provisions regarding transferability of the notes and assignment rights

15. Notices: Communication procedures between parties

16. Governing Law and Jurisdiction: Swiss law as governing law and jurisdiction provisions

What sections are optional to include in a Loan Note Agreement?

1. Security: Include when the loan notes are secured by collateral or guarantees

2. Note Trustee: Required when a trustee is appointed to act on behalf of noteholders

3. Noteholders' Meetings: Include when there are multiple noteholders and collective decision-making procedures are needed

4. Register of Noteholders: Required for registered notes rather than bearer notes

5. Financial Covenants: Include when specific financial metrics need to be maintained

6. Information Undertakings: Add when regular financial or other reporting is required

7. Tax Gross-Up and Indemnities: Detailed tax provisions when cross-border elements exist

8. Change of Control: Include when change of control provisions are relevant for the borrower

9. Subordination: Required when the notes need to be subordinated to other debt

10. Guarantee: Include when third-party guarantees are part of the structure

What schedules should be included in a Loan Note Agreement?

1. Form of Note: Template of the physical or global note certificate

2. Form of Transfer Certificate: Standard form for transferring notes between holders

3. Payment Schedule: Detailed schedule of interest and principal payment dates

4. Conditions Precedent: List of documents and conditions required before issuance

5. Financial Covenant Calculations: Detailed methodology for calculating financial covenants

6. Security Documents: Forms of security documents if the notes are secured

7. Notice Details: Detailed contact information for all parties

8. Form of Compliance Certificate: Template for periodic compliance certification

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

Switzerland

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions




















































Clauses
































Relevant Industries

Banking & Financial Services

Real Estate

Infrastructure

Manufacturing

Technology

Energy

Healthcare

Telecommunications

Private Equity

Asset Management

Construction

Retail

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Finance

Investment Banking

Credit Risk

Securities Administration

Capital Markets

Relevant Roles

Chief Financial Officer

Treasury Manager

Finance Director

Legal Counsel

Corporate Lawyer

Compliance Officer

Investment Manager

Credit Risk Manager

Corporate Finance Manager

Securities Administrator

Debt Capital Markets Associate

Transaction Manager

Senior Finance Manager

Legal Director

Investment Banker

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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