Loan Documentation

by Tahmidur Remura Wahid | Sep 4, 2025 | Uncategorized | 0 comments

Loan Documentation in Bangladesh

Why this guide matters:

Whether you are a Bangladeshi conglomerate raising working capital or a foreign lender financing a greenfield project, the loan documents you sign will govern your cash flows, security, risk allocation, and remedies for years. Bangladesh is a documentary jurisdiction: correct stamping, registration, approvals, and charge perfection are essential to create valid, enforceable obligations. This guide distills the critical legal and commercial points you must address, mapping them against common-law expectations in London, and civil/common-law hybrids in Dubai (DIFC/ADGM and on-shore UAE), so your financing can stand up to regulatory scrutiny and enforcement realities.

If you prefer hands-on support, speak to TRW’s Banking & Finance team (Dhaka • Dubai • London). Start here: TRW Law Firm.

1) The core documents in a Bangladesh loan

A. Facility Agreement (FA)
The central contract setting out the amount, tenor, purpose, drawdown mechanics, interest, fees, representations and warranties (R\&Ws), undertakings (affirmative/negative), financial covenants, events of default (EoDs), and enforcement provisions.

B. Security Documents (tailored to the collateral)

Mortgage Deed (immovable property): Creates a legal mortgage over land/buildings; requires stamping and registration with the relevant Sub-Registrar.
Hypothecation Deed (movables/inventory/receivables): Charges movable assets while the borrower keeps possession; typically backed by insurance assignment.
Pledge Agreement (shares/negotiable instruments): Transfers possession/control to pledgee or its agent; typically includes undated transfer forms.
Assignment of Receivables/Contracts/Insurance: Absolute or by way of security; notice to counterparties is best practice.
Charge over Bank Accounts/DSRA/Collection Accounts: Control agreements and waterfall mechanics (more below).
Intellectual Property Security: Security over trademarks/patents is often perfected with sector registries.
Ship/Aircraft/Special Collateral: Sectoral filings and liens may apply.

C. Guarantees

Corporate Guarantee: From a strong group entity.
Personal Guarantee: From promoters/owners (common in SME/Mid-market).
Sponsor Support/Completion Guarantee: In project finance until commercial operation.

D. Intercreditor & Security Agency
Where there are multiple lenders, a Security Trustee/Agent holds security on trust, with Intercreditor Agreement (ICA) setting ranking, voting, enforcement mechanics, turnover provisions, and standstill rules.

E. Ancillary Documents

Board/Shareholder resolutions, incumbency certificates, signature verifications.
Legal opinions (Bangladesh law; and, where relevant, English/UAE law).
Insurance endorsements (loss payee, assignment, 30-day notice of cancellation).
Undertakings and compliance certificates.
CP/CS (Conditions Precedent/Subsequent) checklist.

2) Status of law and enforcement framework in Bangladesh (practical view)

Contract enforceability is robust where stamping/registration/compliance are correct.
Security perfection hinges on (i) proper stamping; (ii) correct registry filings (Sub-Registrar for mortgages, corporate charge filings with RJSC for company borrowers, and sector registries where applicable); and (iii) notice to counterparties for receivable assignments.
Artha Rin Adalat (Money Loan Court) provides a dedicated route for recovery of bank/financial institution loans. Cheque dishonour actions (Negotiable Instruments regime) remain complementary tactics.
Insolvency & restructuring regimes exist; however, lenders typically rely on security enforcement, restructuring as per central bank circulars/policies, and negotiated solutions, rather than long insolvency processes.
Foreign loans require Bangladesh Bank registration/approval routes, and repatriation of interest/principal must follow foreign exchange control norms.

3) Conditions Precedent (CP) and Conditions Subsequent (CS): the “never skip” list

Typical CP package (Bangladesh + cross-border sensibilities)

Executed FA, security documents, guarantees, ICA/security trust deed (if any).
Corporate authorizations (Board/Shareholder resolutions; constitutional docs).
Evidence of Bangladesh Bank registration/approval (for foreign currency loans) or lender eligibility (for local banks/NBFIs).
KYC/AML documents for borrower/guarantors/sponsors (beneficial ownership).
Updated tax registrations and compliance status.
Title due diligence and non-encumbrance certificates for immovable collateral; valuation reports where relevant.
Insurance binders with assignment/loss payee endorsements.
Account control agreements for DSRA/Collection Accounts.
Legal opinions (Bangladesh law; and, if LMA-style or English-law governed FA, an English law opinion from London counsel).
Required regulatory consents (e.g., BTRC for telecom asset charges; energy regulator consents, if any; sector-specific NOCs).
Financial statements, model, and covenant compliance certificate at signing.

Typical CS items

Post-signing perfection filings (registrations with Sub-Registrar, RJSC, sector registries).
Notices of assignment to offtakers/insurers and acknowledgements.
Final CIB references (if applicable).
Delivery of stamped originals within a specified period.

Dubai/London overlay: Align CP with LMA expectations where English law governs the FA; add DIFC/ADGM or on-shore UAE legal opinions if any UAE nexus exists (sponsor, account, or asset). For English-law facility documents, lenders expect a Bangladesh law capacity and enforceability opinion covering local security and corporate actions, plus a conflict-of-laws note (Governing Law & Jurisdiction clauses).

4) Covenants you should actually negotiate (beyond boilerplate)

Information covenants: Audited/unaudited financials, compliance certificates, project progress, default notices, and regulator notices.

Affirmative covenants:

Maintain assets, insurances, permits, and key contracts.
Keep accounts at specified banks; maintain DSRA and minimum balance.
Ensure tax/VAT filings and payments are timely.
Implement ESG/HSSE policies (fast becoming lender expectations).

Negative covenants:

No additional debt or liens except permitted baskets.
No distributions (dividends, shareholder loans) beyond thresholds.
No disposals of core assets outside ordinary course.
No change in business, control, or key management without consent.
No affiliate transactions on non-arm’s-length terms.
Sanctions/AML/Anti-bribery compliance kept current.

Financial covenants:

Leverage (e.g., Net Debt/EBITDA), Interest Cover, DSCR, Minimum Net Worth, Current Ratio for working capital deals.
Project finance ratios (LLCR/PLCR/DSCR) with robust equity cure mechanics.
Materiality thresholds sized to business cycles (avoid tripwire defaults on seasonal swings).

Dubai/London overlay: LMA schedules often contain detailed definitions and calculation mechanics; replicate that precision in Bangladesh documents. For sponsors with UAE or UK holdings, ensure restricted payments and upstream guarantees comply with local corporate benefit rules (especially in UAE free zones and under English law fiduciary standards).

5) Pricing, yield protection, and tax gross-up

Interest & fees: Base rates (e.g., local benchmarks or agreed floating rate) plus margins, commitment fees, upfront fees, agency/security trustee fees (if syndicated), and prepayment/breakage costs.

Increased costs & illegality: Standard LMA concepts—if regulatory changes increase lender costs or render performance illegal, borrower must prepay or bear the increased cost.

Tax gross-up & withholding: Draft clear gross-up so the borrower bears withholding tax on interest (subject to treaty relief where applicable). Build tax indemnity and FATCA/CRS provisions to avoid lender drag.

Dubai/London overlay: In English-law FAs, detailed gross-up/indemnity regimes and FATCA wording are standard. For UAE nexus, assess local withholding/treaty positions and ensure the documentation anticipates on-shore vs free-zone tax treatments.

6) Security package architecture (Bangladesh realities)

Immovables:

Mortgage by registered deed; verify title chain (mutation, rent receipts, surveys).
Perfection: Stamping + registration at Sub-Registrar within statutory periods.
Practical tip: Map all parcels; borrowers often mortgage only a portion inadvertently.

Movables:

Hypothecation over inventory, machinery, receivables; ensure after-acquired property language and proceeds clause.
Pledge over shares (Bangladeshi company) with undated share transfer forms, control of share certificates and updates to members’ register upon enforcement.

Accounts:

Charge/Assignment over DSRA, collection, and escrow accounts; control agreements with cash-waterfall; lender step-in rights on default.

Contracts & receivables:

Assignment of offtake, EPC/O\&M contracts, leases; issue notices and obtain acknowledgements where strategic (power purchase agreements, anchor offtakers).

Insurance:

Loss payee and assignment endorsements; require insurer acknowledgements and copies of policies.

Intellectual property:

Charge/Assignment over trademarks/patents; sector registry filings.

Sector-specific:

Telecom: Ensure BTRC consent for assignment/charge where required.
Power & infrastructure: Align with implementation agreements and government approvals; check negative pledge in concession documentation.

Perfection checklist (Bangladesh):

Adequate stamping of each instrument.
Registration of mortgage with Sub-Registrar.
Company charge filings for security created by a Bangladeshi company (to be filed with RJSC within the statutory timelines).
Sector filings as applicable (IP, shipping, aviation, telecom).
Notices and acknowledgements to counter-parties and insurers.
Possession/control for pledges and bank accounts.

Dubai/London overlay:

England & Wales: Use a debenture (fixed and floating charges), share charge, account charge; register charges at Companies House within statutory time limits; assign contracts/receivables with notice.
UAE: Free-zone vs on-shore rules differ; DIFC/ADGM provide common-law style security registries; on-shore UAE uses civil-law security regimes and notarial/registry mechanics. Share pledges require ADGM/DIFC or on-shore corporate approvals and registry filings; bank account control is document-driven.

7) Governing law, jurisdiction, and dispute resolution

Governing law: Many cross-border facilities adopt English law for the FA and Bangladesh law for local security. This dual-track approach is market practice.
Jurisdiction: English courts or international arbitration (LCIA/SIAC/ICC) are common. If arbitration is chosen, specify seat (often London/Singapore).
Enforcement in Bangladesh: Foreign judgments/awards are generally enforceable under applicable statutes and treaties, subject to public policy, due process, and reciprocity tests. Security enforcement on Bangladeshi assets follows Bangladesh law procedures regardless of FA governing law.
BIAC is a local institutional option for arbitration clauses.

Dubai/London overlay:

London lenders prefer English law + English courts or English law + LCIA.
For UAE borrowers or sponsors, DIFC/ADGM courts can be selected for disputes where the nexus exists; judgments can be recognized across local systems under specific protocols.

8) Foreign currency loans and exchange control checkpoints

Bangladesh Bank approval/registration is needed for private sector foreign loans. Terms (tenor, interest benchmark, margin, fees) must adhere to prevailing policy parameters.
Drawdown & repatriation: Inbound flows via Authorized Dealer (AD) banks; interest and principal repayments scheduled per registered terms.
Prepayment/refinancing: Often requires notification or updated registration; ensure the FA contemplates make-whole and break costs.
Security in favor of foreign lenders: Permissible, but local perfection rules apply; share pledges in favor of foreign lenders should be structured with approvals where applicable.

Dubai/London overlay:

English-law FAs often contain robust sanctions, AML, anti-corruption representations due to global bank policies; align with Bangladesh compliance regimes.
For UAE platforms (regional treasury centers), structure intercompany on-lending carefully to avoid regulatory leakage or tax inefficiencies.

9) Working capital, term loans, project finance, and Islamic structures

Working Capital Facilities

Overdraft/Cash Credit (CC): Inventory/receivable-backed; monthly stock statements; borrowing-base covenants.
LCs/Trade Finance: Documentary credits, SBLCs, guarantees; collateral includes cash margins and hypothecation of goods.
Short-term loans: For seasonal bulges; ensure alignment with cash conversion cycle.

Term Loans

Amortizing or bullet; prepayment flexibility vs yield protection.
Security: fixed assets, DSRA, insurance.

Project Finance (Non-recourse or limited recourse)

Sponsorship undertakings, completion guarantees, and EPC/O\&M back-to-back provisions.
Accounts & waterfall: Revenue accounts, O\&M accounts, DSRA, MRA, capex reserve; trustee-controlled.
Direct agreements with offtakers/contractors/insurers for step-in rights.
Detailed technical, environmental, and social covenants.

Islamic Finance

Murabaha (cost-plus), Ijara (lease), Musharaka/Mudaraba (equity-style), and Commodity Murabaha (Tawarruq) structures.
Documentation mirrors conventional risk allocation through asset sale/lease/agency sequences while meeting Shariah standards.
Security and perfection generally mirror conventional; ensure Shariah Board approvals and asset trail integrity.

Dubai/London overlay:

LMA and LMA-AFL templates are prevalent in London.
In Dubai, both on-shore and DIFC/ADGM Islamic documents are common; align Bangladesh assets with conventional or Shariah structures chosen.

10) Syndication and agency mechanics

Roles: Mandated Lead Arranger (MLA), Facility Agent, Security Trustee, Account Bank, Hedging Bank.
Voting: Majority lender thresholds (often 66⅔% or 75%), sacred rights require all-lender consent.
Transfers: Lender assignment/novation mechanics; borrower consent not required for defaults; ensure KYC flexibility for incoming lenders.
Hedging: ISDA/Islamic hedging; ensure close-out netting recognition and security sharing/hedging priority in ICA.

Dubai/London overlay:

London syndications default to LMA agency frameworks; replicate agency protections in Bangladesh law security documents so the Security Trustee can enforce without frequent re-papering.

11) Events of Default (EoDs) that truly matter

Payment default (with short grace period).
Breach of financial covenants.
Misrepresentation and breach of undertakings (with cure periods where sensible).
Cross-default to material indebtedness.
Insolvency/insolvency proceedings.
Invalidity of security/guarantees.
Change of control.
Unlawfulness/illegality (sanctions, AML).
Material adverse change (MAC)—negotiate objective triggers or disclosure-based formulations to avoid subjectivity.

Remedies: Acceleration, enforcement over security, cash sweep, step-in, account blocking, appointment of receiver (where available), litigation/arbitration.

12) Stamping, registration, and perfection—non-negotiables

Stamp duty: Pay at execution (or within permitted grace) to avoid penalties and inadmissibility issues. Each instrument (FA, mortgage, hypothecation, pledge, guarantees) carries duty per schedule; confirm with current NBR rates.
Registration:
Mortgages must be registered with the Sub-Registrar.
Company charges must be registered with RJSC within the statutory timeline to preserve priority and validity against liquidators/creditors.
Sector filings (IP, telecom, aviation, shipping) as applicable.
Notices: To lessees, offtakers, insurers, account banks for assignments/charges.
Custody: Secure originals; control access (escrow/closing sets).

Dubai/London overlay:

England & Wales: Strict Companies House charge registration time windows; unstamped/unregistered security risks invalidity against liquidators/creditors.
UAE: Notarial steps and registry filings vary on-shore vs DIFC/ADGM; follow formalities to avoid priority loss.

13) Sector overlays: what changes in regulated industries

Telecom:

Spectrum licenses and network assets often have assignment restrictions; seek BTRC approvals where necessary; structure security over permissible asset classes (equipment, receivables, accounts).

Power & Infrastructure:

Concession agreements and implementation agreements may include negative pledge/assignment rules; align direct agreements with offtaker (e.g., utility) to allow step-in and payment redirection.

Financial Services & Fintech:

Additional Bangladesh Bank oversight; ensure consumer funds segregation and data governance; tailor covenants for capital adequacy/compliance reporting.

Real Estate & Hospitality:

Land title diligence is decisive; zoning/building permits as CP; presales escrow mechanics; construction finance monitors.

Export-oriented industries:

Trade finance lines tied to export proceeds; assignment of export receivables, EEFC accounts (if applicable), and export credit insurance.

14) Common mistakes that derail enforcement (and how to avoid them)

Under-stamping or late stamping → leads to inadmissibility or penalties.
Missing RJSC charge filings → security loses priority (or validity against liquidators/creditors).
Inadequate property diligence → boundary disputes/title defects surface at enforcement.
Unnotified receivables assignments → debtors continue paying borrower; hard to redirect cash.
Loose bank account control → DSRA/collections get siphoned.
Mismatched governing law vs asset location → foreign governing law for Bangladeshi security may complicate enforcement.
Vague covenants → difficult to monitor; defaults become subjective.
Ignoring regulatory consents → security later challenged as void/voidable.
No hedging alignment → interest/currency risk overwhelms business covenants.
Poor conditions subsequent tracking → perfection windows missed.

15) Cross-border structuring with Dubai and London sponsors

Typical patterns we execute at TRW:

English-law LMA FA + Bangladesh law security.
Why: Preserves lender familiarity and documentation discipline while ensuring local enforceability.
Add: English law legal opinion; Bangladesh law capacity & enforceability opinion.
On-shore UAE sponsor guarantee + share pledge in a UAE SPV + Bangladesh operating company security.
Why: Regional sponsor nexus and treasury efficiency.
Add: DIFC/ADGM or on-shore pledge filings; cross-default alignment across jurisdictions.
Cash-waterfall via controlled accounts in Bangladesh, with DSRA top-up from UAE/London.
Why: Keeps revenue capture local but allows cross-border liquidity support.
Add: FX approvals for upstreaming and support payments.
Arbitration with London seat (LCIA/SIAC) + submission to Bangladesh courts for security enforcement.
Why: Efficient dispute resolution plus local asset enforcement.

Sanctions & compliance: Draft to UK/EU/US/UAE standards; Bangladesh borrowers must adopt equivalent internal policies (KYC, PEP screening, beneficial ownership registers, whistleblowing lines, anti-bribery procedures).

16) Restructurings, waivers, and early-warning triggers

Early indicators: Covenant headroom narrowing, delayed MIS, supplier stretch, churn in receivables age, capex deferrals, auditor emphasis-of-matter notes.

Restructuring tools:

Standstill & waiver letters tied to an information pack and cash-sweep discipline.
Amend & extend (margins, tenor, cures).
Security top-ups (additional collateral, enhanced DSRA).
Intercreditor resets (waterfall, voting thresholds).
New money with super-priority or pari passu baskets.

Bangladesh practicalities: Central bank rescheduling guidelines often frame what banks can offer (provisions, classification). Align the documentary changes with regulatory rules to avoid later impairment challenges.

17) ESG, data, and operational covenants modern lenders expect

ESG metrics and reporting: Board-approved policy, compliance attestations, EHS audits for plants and logistics, grievance mechanisms, modern slavery clauses in supply chains.
Data protection & cybersecurity: Incident reporting SLAs, disaster recovery/RPO-RTO targets, encryption/AWS regions if cloud-hosted ERPs hold financial data relevant to waterfall.
Audit rights & site visits: Unannounced audits for inventory-backed facilities; IoT/telemetry feed covenants in logistics-heavy borrowers.

Dubai/London overlay: UK lenders often prescribe Sustainability-Linked Loans (SLL) mechanics (margin ratchets for KPI attainment). For UAE borrowers, align with local ESG reporting frameworks emerging in free zones and on-shore.

18) Practical negotiation strategies (borrower & lender)

For borrowers:

Calibrate financial covenants to seasonality; insert equity cure rights.
Shape restricted payments to permit minimum dividend flows under performance thresholds.
Seek MAC carve-outs and objective standards.
Cap increased cost pass-throughs with market flex only during syndication.
Ensure reasonable reporting intervals to avoid operational drag.

For lenders:

Insist on perfection proof (filed receipts, certified copies).
Secure control over cash accounts and receivable flows.
Require direct agreements with critical offtakers and insurers.
Use security agent structure to future-proof syndicate changes.
Build step-in and pre-agreed enforcement playbooks (receivership/waterfall triggers).

19) Model clauses and schedules worth emulating

Definitions & Interpretation: Precision reduces disputes—mirror LMA engineering (Consolidated Net Debt, EBITDA, Finance Charges, etc.).
Financial Covenants Schedule: Include testing dates, cure mechanics, and auditor confirmation.
Security Principles: Enumerate jurisdictions, asset classes, perfection steps, and timing.
Compliance Certificate template: With ratio calculations and director sign-off.
Know-Your-Customer (KYC) pack schedule: BO registers, IDs, sanction checks, shareholding trees.
Insurance Schedule: Minimum cover, deductibles, change notification, loss payee, co-insureds.
Accounts & Waterfall Schedule: Operating/Collection/Revenue/DSRA/MRA flows, permitted withdrawals, and default-mode sweep.

20) A step-by-step roadmap to your closing in Bangladesh

Term sheet agreed (commercials, covenants, security).
Diligence: corporate, regulatory, title, litigation, financial, ESG.
First drafts: FA (often English-law if cross-border), Bangladesh-law security, guarantees, ICA/security trust.
Regulatory liaison: Bangladesh Bank (foreign loan registration), sector consents.
CP collection: Board approvals, KYC, insurance binders, valuations, account opening/control.
Signing: Execute documents with proper witnessing; e-sign only where permissible.
Stamping: Calculate and pay duty per instrument.
Registration & perfection: Sub-Registrar (mortgage), RJSC (company charges), sector registries; issue notices to offtakers/insurers/banks.
Legal opinions: Bangladesh law; English/UAE opinions if required.
First drawdown: Upon CP satisfaction; confirm FX approvals for foreign currency loans.
CS tracking: File evidence of perfection, notices, and acknowledgements within contractual windows.

21) What foreign companies should be extra careful about

Foreign exchange controls: Build realistic timelines for Bangladesh Bank registrations/approvals and for AD bank operational steps.
Security localization: Bangladesh-law governs security over Bangladeshi assets—do not rely on foreign-law security for local enforcement.
Perfection calendars: Put a D-Day+X calendar for stamping and filings; missing windows can be fatal to priority.
Withholding tax & gross-up: Model net-of-tax returns; design precise gross-up and tax indemnity language.
Sector consents: Power, telecom, aviation, ports—get regulator comfort before signing.
Sponsor support enforceability: Verify corporate benefit, capacity, and any financial assistance issues in sponsor jurisdictions (UAE, UK).
Sanctions & AML: Your global bank will impose UK/EU/US compliance standards; ensure your Bangladesh ops can meet them (policy roll-out, training, testing).
Arbitration seat and recognition: Choose a seat with predictable courts (London/Singapore); ensure award recognition path in Bangladesh is clear; keep Bangladesh-law security outside the arbitration stay where possible.
Data & operational transparency: Prepare to deliver frequent MIS, operational telemetry for borrowing base, and audit access—a cultural/operational shift for some businesses.

22) Quick checklists

A. Borrower CP checklist (abbreviated)

Corporate approvals, specimen signatures, constitutional docs.
Audited financials; latest management accounts.
Insurance binders with loss payee & assignment; insurer acknowledgements.
Account opening and control agreements for DSRA/collection accounts.
Title docs and valuation (immovables); asset schedules (machinery/rolling stock).
Bangladesh Bank foreign loan registration (if applicable).
KYC/AML pack (including beneficial ownership).
Draft compliance certificate template approved.

B. Lender enforcement readiness

Custody of original share certificates, undated transfer forms (pledge).
Copy of registered mortgage and RJSC charge filings.
Executed notices of assignment and receipt of acknowledgements.
Access to account control triggers; pre-agreed enforcement steps.
Legal opinions and reliance letters stored.

23) Sample clause pointers (plain-English prompts for your drafts)

Pari passu ranking: “Obligations rank at least pari passu with all unsecured and unsubordinated obligations, save for statutorily preferred debts.”
Sanctions/AML: “The Group complies with all applicable Sanctions, AML and anti-corruption laws of Bangladesh, UK, EU, US, and any jurisdiction of incorporation or operation.”
Financial Covenants testing: “Quarterly testing on the last day of each financial quarter; cure within 15 business days via equity injection counted in EBITDA for ratio purposes.”
Change of Control: “Any person or group acquiring >X% voting rights or the right to appoint/remove a majority of directors triggers an EoD unless lender consent is obtained.”
Accounts Waterfall: “All revenues to the Collection Account; daily sweep to the Revenue Account; monthly DSRA top-up to the Required Balance; restricted withdrawals per Approved Budget.”

(Your actual drafting should be in full legal language; the above are conceptual anchors to brief counsel.)

24) How TRW structures your deal (Dhaka • Dubai • London)

Integrated execution: We draft and negotiate English-law FAs (LMA-based) with our London team while our Dhaka team perfects Bangladesh security and liaises with Bangladesh Bank and sector regulators. In Dubai, we structure sponsor support and UAE share pledges (DIFC/ADGM/on-shore) and align treasury flows.

Closing discipline: We manage CP rooms, stamping/registration calendars, notices & acknowledgements, and issue coordinated legal opinions. For syndicates, we run intercreditor setups, security trust mechanics, and hedging integration.

Restructuring & disputes: We handle standstills, amend-and-extends, and—if enforcement is inevitable—security enforcement before Money Loan Courts, arbitration with London/Singapore seats, and recognition in Bangladesh.

25) FAQs (short, practical answers)

Q1. Can an English-law facility be enforced in Bangladesh?
Yes, but Bangladesh-law will govern the enforcement over Bangladeshi assets. Keep the FA in English law if preferred, but prepare Bangladesh-law security and follow local perfection rules.

Q2. Do foreign lenders need special permissions to take security?
They can take security, but perfection must follow Bangladesh procedures and Bangladesh Bank rules for foreign currency loans. Sector consents may also apply.

Q3. How are receivables effectively secured?
Use assignment by way of security, issue notices to debtors, and implement account control so cash cannot be diverted.

Q4. What is the most common perfection pitfall?
Late or missing filings (Sub-Registrar, RJSC) and under-stamping. Maintain a perfection calendar from day one.

Q5. Can we choose arbitration in London?
Yes; it’s common in cross-border deals. Keep Bangladesh security outside any stay, and be ready to recognize and enforce awards locally.

26) Executive checklist for CEOs/CFOs

Set covenant headroom realistically; insist on equity cure.
Demand a clear waterfall and account control terms you can operate.
Approve an insurance program aligning with lender requirements.
Require a perfection tracker with dates, responsibilities, and proofs.
Confirm regulatory consents (telecom, power, special assets) are obtained.
Lock down tax gross-up and withholding sizing in the model.
Align governing law/jurisdiction with your group’s litigation/arbitration appetite.
Ensure sanctions/AML policies exist at the Bangladesh opco level—not just at HQ.
Obtain board/shareholder approvals with precise authority wording.

27) Summary table (print-friendly)

Document / Topic	Core Purpose	Bangladesh-specific Actions	Cross-border (Dubai/London) Notes	Who Signs / Holds
Facility Agreement	Sets financial/covenant terms, EoDs	Stamp; ensure FX compliance clauses	LMA style, English law common; add local enforceability opinion	Borrower, Lenders, Agent
Mortgage Deed	Security over immovable property	Stamp + Sub-Registrar registration; title diligence	England: register at Companies House; UAE: notarial/registry steps	Borrower → Security Trustee
Hypothecation Deed	Security over movables/receivables	Stamp; RJSC charge filing (company borrower)	UK debenture equivalent; UAE commercial pledge mechanics	Borrower → Security Trustee
Share Pledge	Control over shares	Share certificates custody; undated transfer forms	DIFC/ADGM or on-shore pledge filings; UK share charge	Sponsor/Shareholder → Security Trustee
Assignment of Receivables/Contracts	Redirect cash/rights	Notices + acknowledgements	Similar in UK; UAE requires contract review for assignment consent	Borrower → Security Trustee
Account Charge / DSRA	Cash control & waterfall	Control agreement with local bank; notices	Standard in UK/UAE; ensure FX compliance	Borrower, Account Bank, Security Trustee
Intercreditor Agreement	Ranking & enforcement rules	Recognized; ensure local security agent powers	LMA ICA used in London; dovetail with BD security trust	All lenders, Agent, Trustee
Guarantees	Extra credit support	Check capacity/corporate benefit	Sponsor guarantees from UAE/UK must meet local rules	Guarantors → Lenders
Insurance Endorsements	Protect asset value	Loss payee & assignment endorsements	Common globally; ensure notice of cancellation covenants	Borrower, Insurers
Legal Opinions	Enforceability & capacity	Bangladesh-law opinion	English/UAE opinions for cross-border FAs	TRW & foreign counsel
FX Registration	Legitimizes foreign loan	Bangladesh Bank registration/approval	Coordinate with London/Dubai treasury centers	Borrower with AD bank
Stamping & Filings	Evidentiary validity & priority	Timely stamping, Sub-Registrar, RJSC, sector filings	UK Companies House; UAE registries	Borrower/TRW

28) How TRW Law Firm can help—end-to-end

Structuring: Cross-border term sheets, tax & FX analysis, security architecture.
Documentation: LMA-based FAs, Bangladesh-law security, ICA, guarantees, hedging.
Regulatory: Bangladesh Bank registrations; sector approvals (BTRC, energy, etc.).
Perfection: Stamping, Sub-Registrar & RJSC filings, sector registries, notices.
Opinions: Bangladesh, English, UAE (with our London/Dubai desks).
Closing & Agency: CP management, signing mechanics, digital data rooms.
Restructuring/Workout: Standstills, amend-and-extend, enforcement strategy, arbitration/litigation.

Contact TRW Law Firm

Tahmidur Remura Wahid (TRW) Law Firm
Contact Numbers: +8801708000660 • +8801847220062 • +8801708080817
Emails: [email protected] • [email protected] • [email protected]

Global Law Firm Locations:

Dhaka: House 410, Road 29, Mohakhali DOHS
Dubai: Rolex Building, L-12 Sheikh Zayed Road.

Disclaimer: This guide is informational and does not constitute legal advice. Financing structures should be tailored to your transaction and current regulations. For a transaction-specific playbook, reach out to TRW’s Banking & Finance team.

Loading…

Loading… | 5 MIN READ | BY TAHMIDUR REMURA WAHID