Legal opinions

Use of legal opinions in a loan transaction

Lenders require legal opinions as a condition precedent to funding and/or as a condition precedent to signing the finance documents in the majority of loan transactions.

Legal opinions provide the addressee, typically the lender(s) or the facility agent acting on behalf of the finance parties, with confirmation of certain legal matters relating to the transaction. They do not typically address factual matters. The opinions provided will depend on the nature of the transaction, the parties involved and the jurisdictions concerned.

Matters commonly covered in legal opinions include:

1. •

   the capacity and authority of the relevant parties to enter into and perform their obligations under the finance documents

2. •

   the due execution of the finance documents

3. •

   the validity and enforceability of the finance documents, and

4. •

   other legal matters relevant to the transaction, including security, choice of law and jurisdiction, no conflict with constitutional documents or applicable law and authorisations and registrations

For more information on the purpose...