Key features of syndicated facilities
Published by a LexisNexis Banking & Finance expert
Practice notesKey features of syndicated facilities
Published by a LexisNexis Banking & Finance expert
Practice notes
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. 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.
Types of syndication
There are three main types of syndicated loan:
- •
underwritten deals where the arrangers guarantee to lend the entire commitment and subsequently look to syndicate the loan. If the loan is not fully subscribed, the underwriters will have to lend the rest of the money themselves
- •
best-effort deals are not underwritten by the arrangers but they simply undertake to do their best to find other lenders to provide the total commitment. The borrower therefore does
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Jurisdiction(s):
United Kingdom
Key definition:
Loans definition
What does Loans mean?
occupational pension scheme resources may not at any time be invested in an employer-related loan. In accordance with section 40 of the Pensions Act 1995, employer-related loans are: loans to the employer or any such person; shares or other securities issued by the employer or by any person who is connected with, or an associate of, the employer; or employer-related investments eg a guarantee or security for obligations of the employer. This does not apply in respect of small self-administered schemes (SSASs) and self-invested pension plans (SIPPs).
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