Loan documentation would be principally affected in the same way as other contracts if the UK left the EU –see the section on Contracts and Other Obligations.

The primary legal questions would be whether directly effective EU law and legislation implementing EU Directives would be retained in the long term by the UK or not, and how such retention would be achieved. Since many transactions have a cross-border element, it would be key to determine which rules would apply to govern conflicts of laws and the mechanism of dispute resolution – see the Disputes section.

It is unlikely that the UK leaving the EU would, of itself, constitute an event of default under a standard facility agreement based on the LMA (Loan Market Association) recommended form, although of course this would depend on the precise terms of the relevant agreement. It also seems unlikely that the doctrine of frustration of contracts would come into play, but this should be borne in mind.

Where lending and securities contracts provide for the governing law to be English and the forum for dispute resolution to be the English courts, a UK exit from the EU would not have a significant effect. There should be no effect on English law security over assets located in the UK or English law guarantees. However, the position would be more complicated where assets or rights to be secured arise as a result of, or are very closely entwined with, EU law. For example certain intellectual property rights arise under EU law (for further details see the Intellectual property section), and security over those rights is perfected by registration at an EU level.