Chapter 5

Structures used in syndicated loans

As noted previously, a syndicated loan is a loan which is provided by two or more banks. Any loan can be syndicated, be it large or small, simple or complex. But in the London Syndicated Loans Market, the way that loans are structured will normally comply with certain general characteristics.

Overview of syndications

There are three types of syndications.

Underwritten transactions

These are also known as a ‘Bought Deal’, under which the whole amount of the facility is guaranteed to the borrower with all the terms and conditions agreed in advance. The loan is underwritten by an arranger who takes the entire transaction risk and will be responsible for the syndication process. Underwritten transactions are ...

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