Document background
The Loan and Guarantee Agreement is a crucial legal instrument used in Philippine financing transactions where additional security is required beyond the borrower's primary obligations. This document is typically employed when a third party (guarantor) agrees to secure the borrower's obligations to the lender, providing an additional layer of security for the loan facility. The agreement must comply with Philippine banking regulations, including BSP Circular 905 regarding interest rates and the Truth in Lending Act for proper disclosures. It is particularly relevant in corporate financing, project finance, and significant personal loans where the lender requires enhanced security. The document encompasses both the primary loan facility terms and the guarantee provisions, ensuring enforceability under Philippine law while protecting the interests of all parties involved. The agreement includes specific provisions addressing local requirements for notarization, documentary stamp tax, and other regulatory compliance matters unique to the Philippine jurisdiction.
