Thursday, January 8, 2015

Syndicated Loans - Deal Life cycle

A Deal is a financial arrangement structures for a company or a group of companies (the borrower(s)) by a bank or a group of banks to meet the financial needs of the company(ies).


Origination
Coverage seeks out deal opportunities.  
Syndication Sales Desk shops the deal to potential investors.

They involve Investment Banking,Syndication/Debt Capital Markets and Corporate Banking in order to structure the transaction (facilities, pricing, bank vs. bond deal).  

Approval
Syndication and Corporate Banking seek credit approval from Credit Risk Management.  
They use an on-line system for eg:  Spider, to create a “CA” or Credit Approval Form.
Closing
Within the Loan Ops area, the Closing Group is responsible for the closing of all new deals both Agented and participated.  
Closing Group reviews the credit agreement for each deal a bank/ institution is an agent, to ensure the proposed deal can be properly administered.  They work closely with the lawyers, investment bankers, borrower, Syndications and Corporate Banking to ensure a seamless closing.
Servicing
Immediately after the closing, if a bank is the Administrative Agent, it assumes responsibility for managing the on-going service needs of  borrowers and investors.  When the institution is NOT an Administrative Agent and act only as a lender, then it respond to requests for borrowings and repayments from the Administrative Agent.

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