Lenders Option Borrowers Option and Loan Market Association: Difference between pages

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(LOBO).
(LMA).


A long term borrowing instrument with periodic interest re-fixings, which incorporates two linked options:
The Loan Market Association is a trade body for the Europe, Middle East and Africa (EMEA) [[syndicated loan]] market, founded in 1996 by banks operating in that market.


#An option for the lender to set revised (usually higher) interest rates at predetermined interest reset dates - for example annually. This is the Lender's option.
Promoting loan markets in various ways, the LMA publishes model documentation and "market guidelines" for use in both primary and secondary markets with a view to achieving more standardisation of widely accepted market practice.
#A linked option for the borrower (exercisable only if the Lender’s option is exercised) either to pay the revised interest rate, or else to redeem the bond. This is the Borrower’s option.




LOBOs have been issued for maturities of up to 50 years.
The [[Association of Corporate Treasurers]] (ACT) has supported the LMA's primary documentation initiative since its inception.  


Each of the two embedded options can be complex to value with precision, potentially making the composite borrowing instrument difficult for some less sophisticated borrowers to evaluate.
The LMA discusses its primary investment grade borrower documentation with the ACT prior to publication.  


With [http://www.slaughterandmay.com/ Slaughter and May], ACT publishes [http://www.treasurers.org/loandocumentation commentaries] on the LMA primary documents.


Also written 'Lender's Option Borrower's Option'.


The LMA published its Green Loan Principles in 2018.


== See also ==
 
* [[Option]]
==See also==
* [[An introduction to loan finance]]
* [[Documentation]]
* [[Documentation risk]]
* [[Green Loan Principles]]
* [[IGA]]
* [[Sustainability Linked Loan Principles]]
 
 
 
===Other links===
* [http://www.lma.eu.com/default.aspx The Loan Market Association website]
 
[[Category:Long_term_funding]]

Revision as of 13:36, 17 September 2019

(LMA).

The Loan Market Association is a trade body for the Europe, Middle East and Africa (EMEA) syndicated loan market, founded in 1996 by banks operating in that market.

Promoting loan markets in various ways, the LMA publishes model documentation and "market guidelines" for use in both primary and secondary markets with a view to achieving more standardisation of widely accepted market practice.


The Association of Corporate Treasurers (ACT) has supported the LMA's primary documentation initiative since its inception.

The LMA discusses its primary investment grade borrower documentation with the ACT prior to publication.

With Slaughter and May, ACT publishes commentaries on the LMA primary documents.


The LMA published its Green Loan Principles in 2018.


See also


Other links

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