The bilateral facility agreement is based on the LMA.Automate corporate lending facility agreement (the “CLFA”) (this template being an amalgamation of the LMA’s investment grade facilities agreement and the most commonly used provisions of the LMA’s leveraged facilities agreement). It has then undergone a number of structural changes (for example, from an agency and security agency perspective) to convert it into bilateral format.

As stated above, the bilateral facility agreement is based on the CLFA, but is in bilateral format. As a result, the provisions of the CLFA which are relevant to arrangers, facility agents, security agents, relationships between finance parties or the syndication process generally are not present.

The assumed structure for the acquisition option is as follows:

• the acquisition is a private acquisition (i.e. it is not an acquisition governed by the Takeover Code);
• the acquisition is carried out either directly or by a newly incorporated SPV set up specifically for the purpose;
• the acquisition is an acquisition of a target company and its subsidiaries;
• upon completion of the acquisition, the target and its subsidiaries will accede to the facility agreement as obligors, providing the usual package of cross-guarantees and security to the finance parties;
• the Company borrows one term loan, utilised in its entirety, to fund the acquisition;
• as a result of the above, the only facility combinations available in the context of the acquisition option are: one term loan facility; one term loan facility plus one revolving credit facility; or one term loan facility, one revolving credit facility and one letters of credit facility;
• the facility in respect of a term loan will be single currency, but in respect of the other facility combinations may be single or multi-currency;
• any equity injection made by the sponsor (in addition to the Company borrowing the loan) to complete the acquisition is outside the scope of the facility agreement;
• representations, undertakings, events of default and conditions precedent are taken from the LMA leveraged finance facilities agreement; and
• security is granted directly to the single lender (i.e. there is no security agent).

In addition to enabling users to produce, negotiate and execute bilateral loan agreements quickly and efficiently, the additional functionality of the platform means that lenders and law firms can go one step further: i.e. “digitise” a loan via the creation of bespoke data sets which can be used for a host of different use cases, including detailed post transaction reporting amongst others.

In addition, the bilateral facility agreement will benefit from any LMA updates and will therefore give lenders and their lawyers the comfort that the template will remain up to date.

No. The LMA is a trade association for the syndicated loan market which produces recommended forms of syndicated loan agreement following in-depth consultation with dedicated working parties who are experts in the particular sector for which the document is produced. The bilateral agreement, by contrast, has been produced, like the CLFA, as a multi-use document, designed to enable LMA.Automate subscribers to produce loan agreements with the most commonly used drafting provisions from the broader LMA suite.