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Loan Participation Agreement Template for Philippines

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Key Requirements PROMPT example:

Loan Participation Agreement

"I need a Loan Participation Agreement governed by Philippine law for a 30% participation in a PHP 500M corporate loan facility, where our bank will be the participant and BDO Universal Bank will be the lead lender, with the agreement to take effect from March 1, 2025."

Document background
The Loan Participation Agreement is a critical document used in Philippine banking and finance transactions when financial institutions wish to share the risks and returns of a loan without creating direct relationships between participants and the borrower. This agreement becomes necessary when a lead lender wants to distribute portions of a loan while maintaining the primary relationship with the borrower, or when banks seek to manage their exposure limits and regulatory requirements. The document must comply with Philippine banking regulations, particularly BSP circulars and the General Banking Law of 2000, while addressing commercial aspects such as participation percentages, payment mechanisms, and risk allocation. It's commonly used in large corporate loans, project financing, and syndicated lending arrangements where risk sharing and regulatory compliance are paramount considerations.
Suggested Sections

1. Parties: Identifies and defines the lead lender and participant(s) entering into the agreement

2. Background: Describes the underlying loan agreement and the context of the participation arrangement

3. Definitions: Defines key terms used throughout the agreement

4. Participation: Details the nature and extent of the participation being purchased, including participation percentage and purchase price

5. Payment and Distribution: Specifies mechanisms for sharing payments received from the borrower and the timing of distributions

6. Rights and Obligations of the Lead Lender: Outlines the lead lender's responsibilities in managing the loan and relationship with the borrower

7. Rights and Obligations of the Participant: Defines the participant's rights regarding the participation and limitations thereof

8. Representations and Warranties: Contains standard representations and warranties from both parties

9. Administration: Covers operational aspects including notices, reporting requirements, and record-keeping

10. Assignments and Transfers: Establishes rules for transferring or assigning participation interests

11. Events of Default: Defines circumstances constituting default and consequences thereof

12. Termination: Specifies conditions and procedures for terminating the participation arrangement

13. Governing Law and Jurisdiction: Specifies Philippine law as governing law and establishes jurisdiction for disputes

14. Miscellaneous: Contains standard boilerplate provisions including amendments, notices, and severability

Optional Sections

1. Regulatory Compliance: Required when participants include regulated entities or when specific regulatory requirements apply

2. Foreign Exchange Provisions: Needed when the underlying loan and participation payments are in different currencies

3. Syndication Provisions: Required when the participation is part of a larger syndicated loan structure

4. Security Interest Provisions: Needed when the underlying loan is secured and participants have indirect interest in the security

5. Sub-Participation: Include when sub-participation rights are to be granted or addressed

6. Voting Rights: Required in cases where participants are granted voting rights in loan decisions

7. Risk Retention: Needed when addressing regulatory requirements for risk retention

8. Tax Provisions: Required when tax implications need specific attention, especially with international participants

Suggested Schedules

1. Schedule 1 - Loan Agreement Details: Copy or summary of the underlying loan agreement's key terms

2. Schedule 2 - Participation Details: Detailed breakdown of participation percentages and amounts

3. Schedule 3 - Form of Transfer Certificate: Standard form for documenting transfers of participation interests

4. Schedule 4 - Payment Instructions: Banking and payment details for distributions

5. Schedule 5 - Reporting Requirements: Templates and timing for required reports

6. Schedule 6 - Communication Procedures: Contact details and protocols for notices and communications

7. Appendix A - Compliance Requirements: Detailed regulatory compliance requirements and procedures

8. Appendix B - Fee Schedule: Breakdown of all applicable fees and charges

Authors

Alex Denne

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

Relevant legal definitions



























































Clauses

































Relevant Industries

Banking

Financial Services

Investment Management

Corporate Lending

Project Finance

Infrastructure

Real Estate

Manufacturing

Energy

Construction

Mining

Telecommunications

Relevant Teams

Legal

Compliance

Credit Risk

Corporate Finance

Treasury

Loan Operations

Investment Management

Portfolio Management

Documentation

Regulatory Affairs

Syndications

Risk Management

Relevant Roles

Chief Financial Officer

Legal Counsel

Compliance Officer

Credit Risk Manager

Syndication Manager

Relationship Manager

Treasury Manager

Banking Operations Manager

Senior Loan Officer

Corporate Finance Director

Investment Manager

Portfolio Manager

Risk Assessment Officer

Documentation Specialist

Regulatory Affairs Manager

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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