The Loan Market Association's Real Estate Finance Facility Agreement: A Borrower's Guide
On 16 April 2012, the Loan Market Association (the "LMA") issued its recommended form of facility agreement for real estate portfolio investment transactions (the "REF Document").
The REF Document was prepared in response to an increased demand, particularly amongst lenders, for a form of standardised loan document for use in English-law real estate finance transactions.
The approach adopted by the LMA when producing the REF Document was to base it to the greatest extent possible on the existing LMA loan documents, particularly the multicurrency term facility agreement (the "Existing LMA Facility"). As a result, many of the 'boilerplate' clauses in the Existing LMA Facility—for example, the tax gross-up provisions, indemnities and increased costs—have been incorporated into the REF Document.
The purpose of this guide is to identify and explain some of the key features of the REF Document that will be relevant to borrowers when approaching this document (though this is not, and should not be regarded as, a definitive guide as to whether those provisions are appropriate to any particular transaction).