A step-by-step guide to Facility Agreements—Part 2

In Part 2 of our Step-By-Step Guide to Facility Agreements, our Banking & Finance specialists-Emma Donaghue and Kate Dart-explain the differences between representations and warranties and how they are distinguished from undertakings. Part 1 introduced the key features of drawdown mechanisms and the importance of accurately describing conditions precedent in a facility agreement.

Most parties involved in commercial and lending transactions will encounter a standard list of representations and warranties when entering into contracts and loan agreements. Although their importance may not always be appreciated at the time, a borrower should be aware of the emphasis a lender may place on these statements and the implications where a breach of those terms may occur.