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SBLC Backed Buyers Credit for Germany

SBLC Backed Buyers Credit Template for Germany

This agreement, governed by German law, establishes a credit facility backed by a Standby Letter of Credit (SBLC) as security. The document structures a financing arrangement where a lender provides credit to a borrower, with the credit being secured by an SBLC issued by a bank. The agreement incorporates provisions compliant with German banking regulations, the German Civil Code (BGB), and international banking practices. It details the credit terms, SBLC mechanics, drawdown conditions, repayment obligations, and enforcement rights, while ensuring compliance with German financial services regulations and EU banking requirements.

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What is a SBLC Backed Buyers Credit?

The SBLC Backed Buyers Credit agreement is utilized when a borrower requires financing for significant commercial transactions, typically in international trade or large-scale procurement scenarios. This document type is particularly relevant under German law, where banking regulations and civil code provisions create a specific framework for secured lending. The agreement combines elements of traditional credit facilities with the security provided by a Standby Letter of Credit, offering lenders additional protection while providing borrowers with access to financing. The document is structured to comply with German banking regulations (KWG), civil law requirements (BGB), and international banking practices. It is commonly used in cross-border transactions where German financial institutions are involved, either as lenders or SBLC issuers, and requires careful consideration of both domestic German law and international banking standards.

What sections should be included in a SBLC Backed Buyers Credit?

1. Parties: Identification of the lender, borrower, and SBLC issuing bank

2. Background: Context of the transaction, purpose of the credit facility, and relationship between parties

3. Definitions: Definitions of key terms used throughout the agreement, including banking, SBLC, and financial terms

4. Credit Facility: Details of the credit facility including amount, purpose, availability period, and drawdown conditions

5. SBLC Security Arrangement: Terms and conditions of the SBLC, including form, content, and maintenance requirements

6. Interest and Fees: Interest rate, calculation method, payment dates, and all applicable fees

7. Repayment Terms: Repayment schedule, prepayment provisions, and payment mechanics

8. Conditions Precedent: Conditions that must be satisfied before the facility becomes available

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

10. Covenants: Positive and negative undertakings of the borrower

11. Events of Default: Circumstances constituting default and consequences thereof

12. SBLC Drawing Conditions: Circumstances and procedures for drawing under the SBLC

13. Governing Law and Jurisdiction: Confirmation of German law governance and jurisdiction provisions

What sections are optional to include in a SBLC Backed Buyers Credit?

1. Security Documents: Required when additional security beyond the SBLC is provided

2. Tax Provisions: Detailed tax clauses needed when cross-border elements create significant tax implications

3. Currency Provisions: Required when facility is provided in multiple currencies or involves currency conversion

4. Agency Provisions: Needed when multiple lenders are involved requiring an agent bank structure

5. Market Disruption: Provisions dealing with market disruption events, required in volatile market conditions

6. Increased Costs: Provisions addressing regulatory changes affecting lender's costs, important in long-term facilities

7. Assignment and Transfer: Detailed provisions needed when parties want flexibility to transfer rights/obligations

What schedules should be included in a SBLC Backed Buyers Credit?

1. Form of SBLC: Template or required format of the Standby Letter of Credit

2. Form of Drawdown Request: Template for borrower to request drawdown under the facility

3. Repayment Schedule: Detailed schedule of repayment dates and amounts

4. Conditions Precedent Documents: List of required documents and evidence for conditions precedent

5. Fee Schedule: Detailed breakdown of all fees and charges

6. Form of Compliance Certificate: Template for periodic compliance certification by borrower

7. Notice Details: Contact details and notice requirements for all parties

8. Form of SBLC Drawing Notice: Template for notice of drawing under the SBLC

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

Germany

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions





















































Clauses


































Relevant Industries

Banking & Financial Services

International Trade

Manufacturing

Infrastructure

Energy

Construction

Transportation

Heavy Industry

Telecommunications

Mining & Resources

Relevant Teams

Legal

Finance

Treasury

Trade Finance

Risk Management

Corporate Banking

Credit Administration

Compliance

International Banking

Documentation

Relevant Roles

Chief Financial Officer

Treasury Manager

Trade Finance Manager

Corporate Finance Director

Banking Relationship Manager

Credit Risk Officer

Legal Counsel

Finance Director

Corporate Treasurer

Trade Finance Operations Manager

Structured Finance Manager

Banking & Finance Attorney

Commercial Director

Risk Management Officer

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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