Key features of syndicated facilities
Key features of syndicated facilities

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Key features of syndicated facilities
  • The difference between bilateral and syndicated loans
  • The Loan Market Association
  • Major syndication principles
  • Advantages of syndicated loans for the borrower
  • Timing of primary syndication
  • Transferability and the secondary loan market

The difference between bilateral and syndicated loans

A bilateral loan involves a borrower (and sometimes other companies in the borrower's group as guarantors and/or security providers) and a single lender.

Where a single lender is unwilling or unable to advance the full amount required by the borrower, the borrower may look to two or more lenders for a loan to meet its needs. Such multi-lender loans can be put in place on a:

  1. club basis—see Club deals, or

  2. syndicated basis—see Syndicated deals

In a syndicated transaction, two or more lenders agree to make loans to a borrower on common terms which are set out in a single facility agreement entered into by all of the parties.

The Loan Market Association

The Loan Market Association (LMA) is the key organisation in the London syndicated loan market. Its objective is to develop and maintain recommended forms of documents and reduce the time and costs spent on negotiations. At the initiative of the LMA, recommended forms of documents for use in the syndicated loan market have been developed by committees involving representatives of the LMA, UK Finance, the Association of Corporate Treasurers and major City law firms. The LMA and the ACT have also produced user guides for LMA documentation. The LMA user guides are available to LMA members on the