Syndicated loan

A loan from a number of different lenders acting together.

The lenders form a syndicate and the borrower borrows from the syndicate.

Historically the lenders were normally banks, acting through an 'agent bank'.

The syndicated loan market also now includes some 'non-bank' lenders, notably hedge funds or pension funds, which will also be lending parties in syndicated loans – in the primary market for sub-investment grade and, in the secondary market more widely too.

Non-bank lenders are particularly attracted to fully drawn, often fixed rate tranches of a loan rather than revolving or stand-by tranches.

Three types of syndicated loan deal are:

1. An underwritten deal
2. A best-efforts deal
3. A club deal

See also

• Agent bank
• Arrangement fee
• Bilateral
• Foreign bond
• Lead bank
• Loan Market Association
• Tranche
• An introduction to loan finance

Other links

• Commentary by The Association of Corporate Treasurers on syndicated loan negotiation and documentation