The date a financing agreement is executed is the signing date, as of when the parties to the agreement are bound by its terms and conditions and the agreement becomes effective (effective date). Each underwriter becomes a finance party to the facility at its signing.  As of facility signing and upon satisfaction of the conditions precedent to the financing, the facility can be drawn down and the borrower receive the funds.

Syndication closing occurs once the total commitment is fully allocated to lenders/investors and when the loan price has stabilized and there is little risk of the underwriters and lenders suffering a loss on their loans in the secondary market.  This is when the syndicate breaks and the loans are free to trade in the secondary market.

The LMA has produced a Syndication Closing Timeline, which sets out the various stages of the Syndication process, including the timing of the transaction being 'free to trade' and the date from which delayed funding compensation is due.

The date on which participant lenders are notified of their allocations, in a manner determined by bookrunner(s), and the syndication closing timetable is confirmed is the allocation date.  The free-to-trade date, as of when the lender/investors can freely sell and trade their loans in the secondary market at the break price, is commonly set two business days after the allocation date.

A syndication closing timeline establishes the various stages of the syndication process, including the commitment date, allocation date and the free-to-trade date.  It is set to ensure an orderly and effective syndication of the facility and seeks to allow the relevant parties (arrangers, underwriters, bookrunners and other lenders) to address the situations that typically arise during syndication.[/donotmark]

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