A loan syndicate is comprised of one or more arrangers, bookrunners, underwriters and participant lenders.  A syndicate’s composition depends on the syndication strategy, which is generally determined by the lead arranger and agreed by the borrower.  It may be either a single-stage general syndication after the initial underwriting of the mandated arranger(s), without sub-underwriting, or a two-stage syndication with the sub-underwriting of co-underwriters prior to general syndication.

As underwriter, the lead arranger commits to provide the financing to a borrower in primary syndication and acts as bookrunner.  A sub-underwriter commits to taking part of the total transaction (total commitment) in primary syndication before the financing is offered to investors in general syndication, among whom the total commitment is subdivided – including lead arrangers.

In cases where multiple underwriters execute the loan agreement as direct co-lenders, [they participate] in the primary closing with the borrower.

Participating banks accept invitations from lead arrangers to underwrite and syndicate the loan.  As participant lenders, they keep a part of the amount they have underwritten, generally equal to their intended final hold amount.  As sub-underwriters, participants share funding and underwriting fees on a pro rata basis.

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