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Supplemental Loan Agreement for Indonesia

Supplemental Loan Agreement Template for Indonesia

A Supplemental Loan Agreement under Indonesian law is a formal document that modifies, amends, or supplements the terms of an existing loan agreement. It must comply with Indonesian banking regulations, particularly those set by the Financial Services Authority (OJK) and Bank Indonesia. The agreement typically addresses changes to loan terms such as interest rates, repayment schedules, security arrangements, or other key provisions while maintaining the fundamental structure of the original loan. It requires careful consideration of Indonesian civil law principles and specific banking regulations, including mandatory provisions for financial services contracts.

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What is a Supplemental Loan Agreement?

A Supplemental Loan Agreement is used when parties need to modify an existing loan agreement without completely restating or replacing it. This document type is particularly relevant in Indonesia's dynamic financial market, where changing business conditions often necessitate loan restructuring or modification. The agreement must comply with Indonesian banking regulations, particularly OJK Regulation No. 40/POJK.03/2019 regarding asset quality assessment and Law No. 7 of 1992 on Banking (as amended). Supplemental Loan Agreements are commonly used for extending loan terms, modifying interest rates, restructuring repayment schedules, or adding/modifying security arrangements. They require careful drafting to ensure consistency with the original agreement while incorporating necessary changes and maintaining regulatory compliance.

What sections should be included in a Supplemental Loan Agreement?

1. Parties: Identification of the lender and borrower, including their complete legal names, registration numbers, and addresses

2. Background: References to the original loan agreement, reason for supplemental agreement, and current status of the loan

3. Definitions: Definitions of terms used in the agreement, including references to definitions in the original agreement that remain applicable

4. Relationship with Original Agreement: Clarification of how this supplement relates to and modifies the original agreement

5. Amendments to Original Agreement: Specific modifications to the original agreement terms, clearly identifying affected clauses

6. Continuing Effect: Confirmation that unmodified terms of the original agreement remain in full force and effect

7. Representations and Warranties: Updated representations and warranties specific to the supplemental agreement

8. Conditions Precedent: Conditions that must be satisfied before the supplemental agreement becomes effective

9. Costs and Expenses: Allocation of costs related to the preparation and execution of the supplemental agreement

10. Governing Law: Confirmation of Indonesian law as governing law and jurisdiction provisions

11. Execution: Signature blocks and execution requirements

What sections are optional to include in a Supplemental Loan Agreement?

1. Additional Security: Required if new security or collateral is being added or existing security is being modified

2. Interest Rate Modifications: Include if there are changes to interest rates or calculation methods

3. Repayment Schedule Changes: Required if loan repayment terms are being modified

4. Currency Provisions: Include for loans involving foreign currency or multiple currencies

5. Financial Covenants: Include if modifying or adding financial covenants

6. Events of Default: Include if modifying events of default or adding new ones

7. Insurance: Required if changing insurance requirements for secured assets

8. Compliance with OJK Regulations: Include specific section if supplemental agreement requires special regulatory compliance provisions

What schedules should be included in a Supplemental Loan Agreement?

1. Schedule 1 - Amended Loan Terms: Detailed list of all loan terms that are being modified

2. Schedule 2 - Form of Effective Date Certificate: Template certificate confirming satisfaction of conditions precedent

3. Schedule 3 - Modified Repayment Schedule: Updated amortization or repayment schedule if payment terms are modified

4. Schedule 4 - Additional or Modified Security Details: Details of any new or modified security arrangements

5. Schedule 5 - Compliance Certificates: Updated forms of compliance certificates if reporting requirements change

6. Appendix A - Original Loan Agreement: Copy of the original loan agreement for reference

7. Appendix B - Corporate Authorizations: Copies of corporate approvals and authorizations for the supplemental agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use

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