Back قرض مشترك Arabic Konsortialkredit German Préstamo sindicado Spanish Kreditu sindikatu Basque وام سندیکایی Persian Syndikaattilaina Finnish Crédit syndiqué French Iasacht sindeacáite Irish Kredit sindikasi ID Prestiti sindacati Italian
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A syndicated loan is one that is provided by a group of lenders and is structured, arranged, and administered by one or several commercial banks or investment banks known as lead arrangers.
The syndicated loan market is the dominant way for large corporations in the U.S. and Europe to receive loans from banks and other institutional financial capital providers. Financial law often regulates the industry. The U.S. market originated with the large leveraged buyout loans of the mid-1980s,[1]: 23 and Europe's market blossomed with the launch of the euro in 1999.
At the most basic level, arrangers serve the investment-banking role of raising investor funding for a business in need of capital. In this context the business is often referred to as an “issuer”, because in return for the loan it issues debentures (which are generally secured and transferable).
The issuer pays the arranger a fee for arranging the deal. Fees increase with the complexity and risk of the loan: the most remunerative loans are therefore those arranged for “leveraged borrowers” — issuers whose credit ratings are speculative grade because they are paying spreads sufficient to attract the interest of non-bank, term-loan investors. The threshold spread varies depending on market conditions. (“Spread” refers to the difference between the lowest interest rate an issuer can obtain, and a reference “risk-free” rate: for example SOFR in the U.S., or Euribor in Europe.)
- ^ Taylor, Alison; Sansone, Alicia (2007). The Handbook of Loan Syndications & Trading. New York: McGraw-Hill. ISBN 978-0-07-146898-5.