Loan Syndication What it is:
Syndicating the loan allows lenders to spread risk and take part in financial opportunities that may be too large for their individual capital base.
Elements of a Syndicated Loan In cases of syndicated loans, there is typically a lead bank or underwriterknown as the arranger, the agent or the lead lender.
This lender may put up a proportionally bigger share of the loan, or it may perform duties such as dispersing cash flows among the other syndicate members and administrative tasks.
The main goal of syndicated lending is to spread the risk of a borrower default across multiple lenders such as banks, or institutional investors such as pension funds and hedge funds. Because syndicated loans tend to be much larger than standard bank loans, the risk of even one borrower defaulting could cripple a single lender.
Syndicated loans are also used in the leveraged buyout community to fund large corporate takeovers with primarily debt funding.
Syndicated loans can be made on a best-efforts basis, which means that if enough investors can't be found, the amount the borrower receives is lower than originally anticipated.
These loans can also be split into dual tranches for banks who fund standard revolvers and institutional investors that fund fixed-rate term loans. Example of a Syndicated Loan Syndicated loans are usually too large for a single lender to handle. For example, Tencent Holdings Ltd.
The loan deal included commitments from a dozen banks with Citigroup Inc.Elements of a Syndicated Loan In cases of syndicated loans, there is typically a lead bank or underwriter, known as the arranger, the agent or the lead lender. Letter Term Definition; letter-# § cooperation provision: A statement in purchase agreements putting the seller and buyer on notice they are able to avoid profit reporting on the transaction and provides cooperation when a § exemption is intended on the sale or purchase of a property.
BREA Background In , Title XI of the federal Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) was enacted by Congress, mandating all states to license real estate appraisers who appraise real property in federally related transactions. Identifying, structuring, documenting and distributing loan syndications is our business, and we're leaders in the field for middle market companies.
PNC has the experience and expertise to effectively lead, structure, arrange, distribute and administer a multi-bank credit facility to help support your company's vision for success.
Get the latest news and analysis in the stock market today, including national and world stock market news, business news, financial news and more. Not As Simple As You Think Are Loan Syndications Anti-Competitive?
February 21, - Many loan market participants might be surprised to discover that syndicated loans could raise antitrust and competition law issues, both at the syndication stage and during restructuring.