Syndicated loan: Difference between revisions
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Historically the lenders were normally banks, acting through an 'agent bank'. | 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. | Non-bank lenders are particularly attracted to fully drawn, often fixed rate tranches of a loan rather than revolving or stand-by tranches. | ||
Revision as of 22:20, 17 January 2016
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:
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
