The following Banking & Finance practice note provides comprehensive and up to date legal information covering:
Mandate letters are typically signed at the start of a transaction, and are often attached to an agreed term sheet. The purpose of the mandate letter is to set out the terms of the engagement between the borrower and the financial institutions that will be acting as mandated lead arrangers (MLAs), bookrunners (who will manage primary syndication) and, if the offer is underwritten, the underwriters.
The issues the mandate letter will cover include:
the formal appointment of the financial institutions acting as MLAs, bookrunners and underwriters
any conditions to the offer by the financial institutions to arrange, manage the syndication of and underwrite the transaction (the offer), one of which will typically be no material adverse change (MAC) to the market, the borrower's business or its ability to perform its obligations under the mandate and finance documents, and
syndication, including market flex, front running and clear market provisions
For more information, see Practice Notes: Mandate letters, Drafting and negotiating mandate letters in loan transactions and Mandate letters in syndicated loan transactions.
The Loan Market Association (LMA) has two forms of mandate letter, underwritten and best efforts.
In an underwritten mandate, the underwriters agree that they will provide the debt needed for the transaction (or an agreed proportion) whether they are able to find other lenders to participate or
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