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


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


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.
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]]
* [[Loan Market Association]]
* [[Tranche]]
* [[Tranche]]
* [[Underwritten deal]]




==Other links==
===Other links===
[http://www.treasurers.org/syndicatedloan Syndicated loans: non-bank lenders; credit derivatives and loan pricing, ACT 2007]
* [http://www.treasurers.org/loandocumentation Commentary] by The [[Association of Corporate Treasurers]] on syndicated loan negotiation and documentation


[[Category:Bank_Lending]]
[[Category:Long_term_funding]]
[[Category:Debt_Capital_Markets]]

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