A syndicated facility is financing where a revolving credit and/or term loan facility is arranged and provided in direct syndication and/or funded in a participation by more than one lender on uniform terms and conditions using common documentation. Syndicated facilities are originated and arranged by one or more commercial banks or investment banks, administered by a common party – usually the loan originator and lead arranger – and marketed to other banks and investment entities with the objective of securing their commitment to provide the financing to the borrower.
"Commitment" means a Facility A Commitment, Facility B Commitment, Facility C Commitment or Revolving Facility Commitment.
The legal, beneficial or economic interest acquired or to be acquired expressly and specifically in or in relation to a syndicated finance facility is a facility interest. Be it revolving credit and/or a term loan, whether by way of assignment, novation, participation or any other means of loan transfer, it is most commonly called a “syndicated loan”.
The key reason for syndicated lending is for the raising of financing that is beyond the capacity of any one of the borrower’s relationship banks. Another reason for syndicated lending is that a large amount of financing can be obtained more quickly and at a lower total cost than from multiple bilateral loans from different lenders.
An average [US] syndicated loan facility has a size (loan amount) of $217 million [...].
2024-09-11T11:55:43+02:00Syndicated lending may also be attractive to borrowers looking to achieve diversification of their funding sources while creating new or strengthen existing relationships with their relationship banks. A successful syndicated transaction can also bring to the borrower positive publicity in the financial community and facilitate future borrowing.
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