Syndicated Loans

Sometimes a borrower requires funding in an amount that presents too great a risk to a single lender should there be a default. Sometimes the lender would like to diversify its lending portfolio or expand into another geographic market or industry. In either case, a syndicated loan may be the solution.

In such situations, a lead bank or underwriter of the loan, known as the "lead lender", will often seek to put together a group of lenders (called a syndicate) who work together to provide funds for a single borrower. The lead lender, in addition to providing funds to the loan syndicate, performs duties such as administering the loan advances to the borrower, dispersing cash flows among the other syndicate members and other administrative tasks.

The Syndicated Loans Team at Rosenberg Martin Greenberg is dedicated to assisting its lender clients through each step of the syndicated loan process. From assembling bank syndicates to preparing loan documentation and negotiating the terms, RMG attorneys are experts in the field.

Syndicated Loan Agreement

The agreements among the syndicate members may be part of the loan agreement with the borrower or may be contained in a separate syndication agreement. The loan documentation needs to clearly spell out the roles of each of the parties, including their rights and obligations, as well as their relative priorities.

The Syndicated Bank Loans Team at RMG has the industry experience to assist at each step of the syndicated lending process, including:

• Assembling syndications
• Drafting necessary syndication agreements
• Reviewing syndication documents for syndicate members
• Negotiating all relevant loan documents

Benefits of Syndicated Lending

There are very attractive benefits to syndicated lending, including the reduction of risk that a large debt would pose in the event of a default; syndication spreads the risk across multiple lenders who are each equipped to handle a smaller loss.

For banks looking to diversify a loan portfolio, syndication allows the opportunity to share in smaller pieces of large loans in new industries. It also opens smaller and regional banks up to borrowers in other geographic locations who are seeking higher capital. Syndicated lending also allows banks with capital to asset ratios near the minimum allowable to share in large loans without increasing assets. For lead arranger banks, the syndication arrangement provides the opportunity to generate fees for performing the administrative role.

Syndicated Loan Attorneys

Partnering with a law firm that specializes in syndicated loans is the best way for a lender to ensure it stays up to date on the latest trends in the syndication markets and also the potential risks. Rosenberg Martin Greenberg provides expert assistance covering all aspects of a syndicated loan transaction, from implementing a structure, to performing due diligence, to refining, documenting and completing the transaction.