Right or wrong: loan transfers and lender flexibility

Author: | Published: 5 Mar 2018

Are recent trends restricting loan transfers reasonable or an unnecessary fetter on lender flexibility?

1 Minute read
There has been a lot of recent tension between borrowers and lenders on transfer provisions in loan agreements.

Borrowers are increasingly seeking tighter restrictions on transfers by lenders. This article considers whether new restrictions being imposed on the transferability of loans are reasonable or an unnecessary constraint on the trading of loans.

It also addresses the concept of deemed consent, when consent can be withheld or delayed, and some recent trends and statistics for transfer restrictions and sub-participations.

Transfer and assignment provisions in English law loan agreements are often hotly negotiated. There has recently been an increasing encroachment by borrowers on these provisions.

Historically, many loan agreements required borrower consultation only (as opposed to consent) for assignments or transfers by lenders of loan participations. The current Loan Market Association (LMA) form for leveraged...