Loan documentation in Africa is about to become far
more uniform thanks to the launch on Thursday of the African
Loan Market Association (Alma).
The Association, which has the support of the Loan
Market Association (LMA) in London, has already formulated
standardised loan documents for South Africa, with drafts for
Kenyan and Nigerian loan agreements due to enter a working
group on Thursday.
The key South African banks (ABSA, Investec,
Nedbank, RMB and Standard Bank), together with Norton Rose, are
already members of the body.
"We’re keen to get some of the big
Nigerian and Kenyan banks onboard too," said Steven Gamble, a
director of Norton Rose and a member of the Alma board.
The South African documents are primarily intended
for the big domestic South African deals. The English law
documents, however, are intended for the cross border deals,
the bigger facilities or for inbound deals into Africa.
The new documents are closer to the Asia Pacific
Loan Market Association (APLMA) than the LMA. "These are
slightly simpler, more bank-friendly documents than the
LMA’s," said Gamble, who is the only lawyer on the
The need for Alma was clear. Until now, all banks
and law firms have their own precedents on loan documents in
South Africa, Nigeria and Kenya.
"These may be partly LMA-based, but
they’re not always," said Gamble. "Every deal you
do in these countries, especially domestic syndications, result
in disparate documentation which is often expensive," said
"We are trying to get all the lenders in these
domestic markets to accept a standard which they can then tell
their lawyers or in-house legal to draft."