Česky
KB EU POINT
 NEWS |
Syndicated loan
Syndicated loan is designed for:
- large and medium companies
- the government and municipalities
- financial institutions
What is syndicated loan?
Syndicated loans are a special category of loans in which an arranger, or group of
arrangers, forms a group of creditors on the basis of a mandate to finance the
debtor. The debtor is usually a company with an excellent rating. The debtor
chooses this type of loan primarily because the required loan volume exceeds the
possibilities of one creditor through bilateral financing, both from the perspective
of a risk analysis of the debtor’s position as well as the creditor’s strategy. Despite
the fact that the debtor and creditors only enter into one contract, the creditors’
rights and obligations are several and independent of each other. Following the
formation of a syndicate of creditors who have agreed to participate under the
terms and conditions specified by the arranger, at the end of syndication phase
one bank is usually chosen from the group of arrangers to act in the capacity of
syndicated loan administrator (agent).
The main characteristic of syndicated loans is their variability, given by the fact
that the potential debtor can ask for offers from various arrangers from which he
can then choose a concrete solution. This can be highly individual and may be
varied prior to the closure of a mandate contract. Each case is evaluated
individually, so that there are practically no two syndicate loan contracts that are
exactly alike.
Creditors formed under a syndicated loan contract have the right to sell their
positions on a secondary market. The contract anticipates this and creates
effective mechanisms for exercising this right, which is very attractive for
investors. The contract includes standard provisions regarding grace period, pari
passu terms and negative pledges, allowing investors to accept conditions that are
most advantageous for them.
KB can arrange the following types of syndicated loans in volumes from CZK 500 million to CZK 10 billion:
- revolving
- payable at the end
- term or progressively repatable term
- short-term, mid-term or long-term
- secured or unsecured
Our team of syndicated loan specialists offers a complete client service in all phases of the syndication process, including:
- consulting services on all aspects of syndicated loans
- arranging syndicated loans– from market monitoring to final offer
- act in the capacity of the agent
- professional approach from client specification to optimization of cash flow and capital structure – KB can assume responsibility for the placement of a syndicated loan on the market to the complete satisfaction of both the client and investors
Syndicated loan benefits:
- optimization of liabilities for the client
- major reduction of risk for investors
- benchmark, simplifies the determination of price for next syndication
- achievement of optimal market price with lowest risk thanks to the "best offer" principle
- opportunity to obtain loan volume exceeding the possibilities of bilateral financing many times over
- the product is individually modified for each client, enabling the solution of concrete financial needs
Syndicated loan allow you to:
- finance corporate expansion
- refinance existing financial obligations
- acquire an alternative source of financing
- finance mergers and acquisitions
- secure project financing
How can you arrange the Term Account?
If you are interested in learning more about this product or if you would like to apply for this product directly, please contact your bank advisor or call the KB toll free line 800 111 055.
