Document background
The Bridge Facility Agreement is utilized when a company requires immediate financing but expects to replace it with longer-term funding or complete a specific transaction in the near future. Common scenarios include M&A transactions, real estate acquisitions, or refinancing situations where timing gaps exist between funding needs and permanent financing availability. The agreement, governed by Canadian law, typically includes step-up pricing mechanisms to incentivize refinancing, detailed conditions precedent, and specific repayment triggers. It must comply with Canadian federal banking regulations and provincial securities laws, particularly regarding interest rate calculations, security registration, and disclosure requirements. The Bridge Facility Agreement will often contain provisions for security interests under relevant provincial Personal Property Security Acts and consider requirements under the federal Bank Act for regulated lenders.
