The UK’s Association of Corporate Treasurers (ACT) recently issued a supplement to its guide for borrowers to the Loan Market Association (LMA) investment grade forms of facility agreement and key negotiating points for borrowers (the ACT Borrower Guide) which will be of interest to those looking to review and negotiate such a facility agreement.

The LMA forms of investment grade facility agreement have been changed a number of times since publication of the ACT Borrower Guide in 2013, in particularly in respect of:

  • amendments to the definitions of “LIBOR”, “Euribor” and related provisions arising from the reforms to their benchmark process and administration;  
  • an optional adjustment to the borrower’s right to prepay a defaulting lender;  
  • amending the tax clauses to permit affected parties to withhold pursuant to FATCA and imposing information- sharing obligations on all parties;  
  • updates to the increased costs clause to highlight the possibility of amendment to reflect commercial deals with regard to the costs associated with Basel III;  
  • amended provisions giving an agent protection against incurring liabilities in the discharge of its function;  
  • additional matters requiring unanimous lender consent;  
  • mandatory costs provisions becoming optional; and  
  • amendments to reflect changes that borrowers often seek.

This new supplement considers the changes made and their implications for borrowers.