Update to Facility Agreements20 March 2020
Further to the publication of revised investment grade and real estate finance investment facility agreements on 28 February 2020, the LMA has today published revised versions of its recommended forms of Facility Agreements for Leveraged, Real Estate Finance Development Transactions, Private Placement, Commodity Finance, Export Finance and Developing Markets deals, Users Guides, RFR documentation and other associated documents. As with the investment grade documents, the main change that has been made to the facility agreements is the inclusion of the LMA recommended form of replacement of screen rate clause as part of the amendments and waivers clause. Until now, this clause had to be slotted in to the facility agreements on a case by case basis. However, given the expected discontinuation of LIBOR at the end of 2021, uncertainty surrounding other benchmarks and the growing market practice to include these provisions in facility agreements, the LMA has now incorporated them into the recommended forms. The main purpose of the clause is to provide the parties with greater flexibility to include a replacement benchmark in the Facility Agreement if a Screen Rate Replacement Event occurs.
The LMA has also taken this opportunity to make further updating changes to these documents, such as the removal of references to Mandatory Costs. All changes that have been made are highlighted in the published mark ups.
Please note that the recommended form of Facility Agreement for Real Estate Finance Multiproperty Investment Transactions been further updated to correct some typographical errors and to make some additional conforming changes that were picked up post publication last week