On Monday 16 April 2012 the Loan Market Association launched its recommended form of single currency term facility agreement for use in real estate multi-property investment transactions. The document has been produced in response to demand from market participants for a starting point for documenting real estate finance transactions in much the same way as such documents already exist for the investment grade and leveraged finance markets. Whilst facility agreements in real estate transactions have, for a long time, loosely followed the existing LMA forms, this is the first time that an agreement has been produced by the LMA solely for real estate transactions. The new document should help, particularly over time, to standardise the approach taken to real estate specific issues and should assist all parties by reducing the time spent negotiating boiler-plate type clauses.

The new document is largely based on the investment grade LMA term facility agreement. However, wording for normal real estate finance account requirements (such as general and rent accounts) have been included, along with representations, undertakings, financial covenants and events of default specific to real estate transactions...