Loan Market Association Has Published Model Provisions For Sustainability-Linked Loans

Sustainability-linked loans have become increasingly common in recent years, and the Loan Market Association (LMA) has responded to this by publishing model provisions for sustainability-linked loans. These model provisions follow on from the updated Sustainability Linked Loan Principles and the accompanying guidance published in February.

The model provisions aim to strengthen the integrity of the sustainability-linked loan market, among other things, by providing a basic drafting framework for negotiations. The model provisions are non-binding and intended to act as a basis for drafting an agreement and negotiation and to reflect current market practice. This brings documentation used in the market closer to a standard while streamlining the negotiation process which, until now, has often been time-consuming given the range of different practices concerning agreements within the market.