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What is the moral hazard in loan syndication?
Mandated lead arrangers are commonly the borrower’s main relationship lender. Such relationship lending has a significant impact on loan terms and moral hazard towards syndicate p...
What is the LMA acquisition finance process?
In broad terms, an acquisition finance modeled on the LMA template Leveraged Document operates as follows: The mandated lead arrangers commit to provide the "certain funds"; Invest...
The lease rate is the periodic payment made by the lessee to the lessor for the use of an asset in a lease transaction expressed either as the annual percentage rate (APR) or a lea...
What is the information memorandum?
The information memorandum (info memo; [AE] bank book) is a detailed description of the borrower, its business and financial condition and the proposed transaction used by prospect...
The income statement is a financial statement that reports the results of an entity’s business activities for an accounting period by showing its revenues, expenses, gains and loss...
What is the IFRS expected credit loss (ECL) model?
Under IFRS 9, debt instruments, excluding purchased or originated credit impaired financial instruments, move through three stages as credit quality changes after initial recogniti...
The fee letter is a private document between mandated lead arrangers and borrowers that identifies the type and amount of fees payable by the borrower with respect to a syndicated...
What is the expected loss on leases?
Expected loss (EL) is the amount of a credit exposure that a creditor (lender, lessor) can expect to lose in the event of default on a credit exposure equal to the exposure less th...
What is the effective interest-rate method to amortize leases?
A technique for calculating and amortizing the cost of a financial instrument by allocating the interest revenue or expense at a constant periodic rate over its life is the effecti...
What is the certain funds provision?
The certain funds provision obliges lead arrangers to provide certain funding to the borrower in order to complete the cash payment of an acquisition within a specified amount of t...
