LMA launches development facility agreement

Clare Dawson: agreement represents LMA's increased activity in real estate
Clare Dawson: agreement represents LMA’s increased activity in real estate

The Loan Market Association unveiled its second standard document for the real estate market this month.

The Real Estate Finance Development Facility Agreement was launched at the LMA’s first conference on real estate, held in London on 13 May. It follows last year’s facility agreement for investment properties.

The group, which also produces documentation for other market sectors and aims to promote depth and transparency in the primary and secondary syndicated loan markets, moved into real estate two years ago in response to demand from its banking members.

Clare Dawson, the LMA’s managing director, said the real estate development document was “representative of the LMA’s increased activity in this area of the market”.

“Following a significant rise in both overseas and non-bank investment, we hope it will contribute to attracting new entrants to the market and lead to more efficient and productive negotiation of documentation”. The drafting was led by Allen & Overy’s London head of real estate finance, Mark O’Neill.

Lesley Wan, real estate legal counsel at Lloyds, told the conference that Lloyds was using the LMA’s Real Estate Finance Investment Facility Agreement “for new lending and that it has minimised legal risk, helped achieve consistency in the market, and is resulting in cost efficiencies across the piece”.