In a syndicated loan, multiple banks and non-bank financial institutions lend a proportion of the total amount of the borrower's loan by making separate commitments. An agent bank is appointed by the members of syndicate to interact with the borrower on behalf of the syndicate, receive repaymentsto facilitate borrowings and distribute them in the correct amounts to the lenders, and to administer the loans. Once a company decides to borrow money, it approaches one bank to be the lead bank and to arrange for the syndicate of lenders to make the loans. . The lead bank performs a due diligence review of the business and financial condition of the borrower and its subsidiaries to determine the terms on which the lenders lend money to the borrower.While negotiating the loan documents, the lead bank begins to acquire commitments from other lenders to make a portion of the loans.
The initial draft of the loan agreement should be consistent with the term sheet, but is then negotiated as the details are expanded on in the documents. For the lead bank to be able to sell the loans to other lenders, the terms of the loan agreement should not vary too much from other bank loan deals that are then in the market for a similarly situated borrower. Once a company decides to borrow money, it approaches one bank to be the lead bank and to arrange for the syndicate of lenders to make the loans. The lead bank performs a due diligence review of the business and financial condition of the borrower and its subsidiaries to determine the terms on which the lenders lend money to the borrower.Apart from the above an approval from its credit committee is required to make the loan. The lead bank instructs its counsel to draft Commitment letter, fee letter and term sheet determining the major terms on which the lenders agree to make the loans and the fees that the borrower will be charged.
Passport photo of all parties.
PAN card of all parties.
Aadhar card of all parties.
Utility bill of Electricity or Telephone.
Valid Address Proof of all the parties.
Valid Driving Licence of all the parties.
Terms and Conditions between the parties.
Other documents will be intimated through e-mail.
A syndicated loan is also known as a syndicated bank facility, is financing offered by a group of lenders called as a syndicate. These syndicate work together to provide funds to a single borrower. The borrower can be a corporation, a large project, or a government.
Generally a syndicated loan, two or more banks agree jointly to make a loan to a borrower. Every syndicate member has a separate claim on the debtor, although there is a single loan agreement contract.
A syndicate is a temporary alliance formed by professionals to handle a large transaction that would be impossible to execute individually. By forming a syndicate, members can pool their resources together, and share in both the risks and the potential for attractive returns
There are three types of syndicated loans: Underwritten Deal -The lead agent or underwriter syndicates the entire loan. Club Deal -This type of syndication deal typically entails a smaller amount. Best-Efforts Syndication Deal-The lead agent does not commit or guarantee the entire loan amount.
Loan syndications is the division that along with syndication, underwrites loans for the corporate banking division in the investment bank.
Loan syndication allows borrowers to borrow large amounts to finance capital-intensive projects. A large corporation or government can borrow a huge loan to finance large equipment leasing, mergers, and financing transactions in telecommunications, petrochemical, mining, energy, transportation, etc.