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LPC: CSAM, Molson Coors warn investors of Brexit impact

NEW YORK, July 6 (Reuters) - Companies that borrow to help fund their operations and the firms that lend to them are warning potential investors that the recent vote by the United Kingdom (UK) to leave the European Union (EU) may affect earnings and debtholder returns.

Borrowers are including language in their bond documents warning that market volatility and uncertainty caused by the June 23 referendum may impact their earnings and their ability to access credit markets. The day after UK citizens went to the polls, markets were in a tailspin with the Dow Jones Industrial Average falling more than 600 points, and loan and structured credit indices also dropping.

"The risk factors seem to be focused on - none hit on all of the potential risks - that there may be an impact on the results of operations of the issuer, if, for example, they have a significant UK business that could be impacted by changes in exchange rates for the British pound," said Jeffrey Ross, a partner in law firm Debevoise & Plimpton's finance and private equity groups in New York.

"A couple of offering memorandums focus on the ability to access the capital markets and some risk factors call out that could not only impact the results of operations of the company, but may also impact the debt and equity capital markets and a company's ability to refinance," he said.

Uncertainty in the market is leading companies - at least seven since the vote, according to an Xtract Research report - to include different types of Brexit risk disclosures in their bond offering documents.

A borrower "would...