As soon as a bank is awarded the lead arranger mandate, it prepares for the syndication of the financing.  The syndication process usually involves the following steps:

  1. Agreement and confirmation of the syndication strategy and the prospective co-underwriters and/or participant lenders to be invited into the syndicate;
  2. A syndication agreement that clearly defines the role of the syndicate members and sets forth their respective rights and obligations;
  3. Preparation of the invitation letter and the confidentiality agreement for the prospective participants;
  4. Sending invitations to the prospective co-underwriters and lenders to participate in the syndication;
  5. Preparation of the information memorandum and the financial and marketing materials;
  6. Participant access to the deal information usually via a secured website, after their signing the confidentiality agreement;
  7. A bank meeting, where mandated lead arrangers address questions and negotiate the deal, announce closing fees, and establish a timetable for commitments and syndication closing;
  8. Preparation and distribution of draft facility documents to prospective participants for review and comment;
  9. Submission of commitment letters by interested participants setting out the terms of their participation; and
  10. The signing of the facility documents, upon which the syndicate closes.

From launch to syndication closing, it can take 10-12 weeks.  For complicated financings, syndication can take much longer and the process can vary, such as the signing of leveraged facilities to start syndication and their primary syndication after closing.

While syndication closing normally marks the end of primary syndication, LMA Leveraged Facilities contemplate primary syndication taking place post-closing.  Only mandated lead arrangers become lenders prior to the syndication date, which is the intended date upon which primary syndication of the facilities is deemed completed.

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