loan syndication

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loan syndication

lending by a group. The size of some loans is so large that no single financial institution would possess either the resources or the inclination to lend the entire sum on its own. In such cases a syndicate of institutions is formed to provide the necessary funding. The syndication process starts when either a borrower approaches a bank and invites it to initiate arrangements for a syndication facility or when the bank itself approaches a corporate borrower that it believes is seeking funds. The bank (known as the managing bank) will then:
  1. (1) settle in outline with the company the financial and other terms on the basis of which the loan is to be promoted;
  2. (2) approach prospective lenders in the market and provide them with details of the proposed loan and information about the borrowers in order to enable a judgment to be made as to whether or not to participate; and
  3. (3) negotiate the details of the loan agreement with the borrower. Loan syndications, therefore, comprise two distinct sets of agreements: those governing the formation of and participation in the syndicate and those governing the relationship between the syndicate and the borrower, in effect, the loan agreement itself.
References in periodicals archive ?
Credit Suisse (NYSE: CS) has said that it has hired a banker for its Asia Pacific loan syndications team in Hong Kong.
Wells Fargo Securities, the investment banking and capital markets business of Wells Fargo & Company, announced today that Jim Jeffries and Gary Wolfe have been appointed co-heads of the Loan Syndications and High Yield Debt Capital Markets group, effective October 1st.
Nearly 50 per cent of cross border loan syndications in the region comes from European banks.
Bricker's practice extends to transactions involving loan syndications and participations, as well as to the origination of first mortgage loans for securitization.
At Celtel, he raised equity and debt financing for the group--parent and subsidiaries--and arranged a total of $1bn medium term financing across sub-Saharan Africa through local and international loan syndications and bond issues.
The smallest participants in loan syndications -- including Japanese financial institutions and regional banks -- are no longer interested in participating for a paltry share of commitment fees.
Among the transactions the ED covers are securitizations, sales of partial interests, repurchase agreements, securities lending, loan syndications and participations, sales of receivables with recourse and servicing of mortgages and other loans.
Accordingly, the financial innovations of recent years have facilitated investment banks' development of commercial banking expertise through money market and other mutual funds, bridge loans, and loan syndications.
9 billion-asset Chemical now comfortably dominates the market for global loan syndications.
The banking company said that the bank's operations would focus on sharia-compliant loan syndications.
At the EBRD, the Vice Presidency Finance is holding the position for Treasury, Loan Syndications and Capital Market Development as well as Financial Strategy and Policy and Financial, Budget and Business Planning and Capital Management.