Loan & Facility Documentation

Overview

Loan and facility documentation is the legal architecture on which every lending transaction rests. The quality of that documentation determines whether the lender's exposure is protected by enforceable security, whether the borrower's obligations are precisely defined, and whether the facility can be restructured, assigned, or enforced without the documentation itself becoming the obstacle. Indian lending documentation has been materially shaped by the IBC framework, the SARFAESI Act, and the Reserve Bank of India's regulatory directions — creating a documentation environment that must simultaneously satisfy multiple legal requirements. Security documentation must be structured to qualify as a recognised security interest under the applicable statute, whether it is an equitable mortgage, a registered charge, a hypothecation, or a pledge. The enforceability of security on default depends critically on whether the creation, perfection, and registration requirements have been complied with from the outset. Term loan documentation for project finance, acquisition finance, and real estate lending each carry distinct structural requirements. Project finance documentation must address drawdown conditions linked to project milestones, revenue waterfall structures, lender consent rights over material project decisions, and step-in rights that allow lenders to protect the underlying project when the borrower defaults. Acquisition finance documentation addresses the target company as security and must align with the completion mechanics of the underlying acquisition transaction. Real estate lending documentation must reflect the title position and the applicable security creation mechanism for the specific property type. Working capital facility documentation — fund-based limits, non-fund-based limits, letters of credit, bank guarantees — operates on shorter timeframes but is no less complex in terms of security structure, covenant architecture, and event of default provisions. Cash credit limits secured by hypothecation of current assets require documentation that is regularly reviewed and refreshed to maintain security effectiveness. For transactions involving multiple lenders, the intercreditor agreement and the security trustee arrangement create an additional layer of documentation complexity. The RBI's Guidelines on Prudential Framework for Resolution of Stressed Assets has added regulatory prescription to the intercreditor framework for bank lending, requiring documentation that addresses the mandatory timelines and voting thresholds specified by the regulator. Corpus Juris Legal drafts and negotiates lending documentation from both sides of the transaction, with equal facility representing lenders and sophisticated borrowers.

Key Service Components

• ◆Term loan and revolving credit facility agreement drafting and negotiation
• ◆Security documentation — mortgage, hypothecation, pledge and charge creation
• ◆Security registration and perfection under MCA21, CERSAI and applicable state registries
• ◆Intercreditor agreement and security trustee arrangement documentation
• ◆Project finance documentation — conditions precedent, drawdown mechanics and waterfall
• ◆Acquisition finance documentation aligned to transaction completion mechanics
• ◆Working capital facility documentation — CC limits, LC and bank guarantee structures
• ◆Guarantee and indemnity documentation — corporate and personal guarantees
• ◆RBI regulatory compliance for lending documentation across bank and NBFC transactions
• ◆Lender-side and borrower-side advisory on facility agreement negotiation

Our Approach

Corpus Juris Legal approaches loan documentation with the understanding that every facility will, at some point, need to be enforced, restructured, or assigned — and we draft accordingly. We do not produce standard-form documentation without applying close legal judgment to the specific transaction structure, the nature of the security, and the regulatory environment in which the lender operates. Our banking lawyers bring direct experience of enforcement proceedings and insolvency situations, which sharpens the precision of our documentation work.

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