Syndicated loan: Difference between revisions

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A loan from a number of different lenders acting collectively.
A loan from a number of different lenders acting together.  
Historically the lenders were normally banks, acting through an 'agent bank'. More recently some 'non-banks', notably hedge funds or pension funds, will also be parties to 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 rather than revolving or stand-by tranches.
 
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:
 
# An [[underwritten deal]]
# A [[best-efforts deal]]
# A [[club deal]]
 
 
Loans which are not syndicated are known as bilateral loans.
 


== See also ==
== See also ==
* [[Agent bank]]
* [[Agent bank]]
* [[An introduction to loan finance]]
* [[Arrangement fee]]
* [[Arrangement fee]]
* [[Best-efforts deal]]
* [[Bilateral]]
* [[Bilateral]]
* [[Club deal]]
* [[Club deal]]
* [[Foreign bond]]
* [[Foreign bond]]
* [[Lead bank]]
* [[Loan Market Association]]
* [[Tranche]]
* [[Tranche]]
* [[Underwritten deal]]
 
 
===Other links===
* [http://www.treasurers.org/loandocumentation Commentary] by The [[Association of Corporate Treasurers]] on syndicated loan negotiation and documentation


[[Category:Long_term_funding]]

Latest revision as of 21:06, 23 September 2021

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


Loans which are not syndicated are known as bilateral loans.


See also


Other links