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Syndicated loan, the Glossary

A syndicated loan is one that is provided by a group of lenders and is structured, arranged, and administered by one or several commercial banks or investment banks known as lead arrangers.^[1]

74 relations: Accredited investor, Amortizing loan, Arbitrage, Bank, Bond credit rating, Bond fund, Bond market, Book building, Borrowing base, Closed-end fund, Club deal, Collateral (finance), Collateralized loan obligation, Commercial bank, Commercial paper, Corporate bond, Corporation, Cov-lite, Credit rating, Debtor in possession, Default (finance), Duration (finance), Equity (finance), Euribor, Eurozone, Federal Deposit Insurance Corporation, Federal Reserve Board of Governors, Financial capital, Financial institution, Financial law, Financial market participants, Financial modeling, Financial Services Authority, Flex language, Guarantee, Hedge fund, High-yield debt, Institutional investor, Insurance, Investment banking, Jurisdiction, Lead arranger, Letter of credit, Leverage (finance), Leveraged buyout, Loan Market Association, Mergers and acquisitions, Mezzanine capital, Money market fund, Mutual fund, ... Expand index (24 more) »
Financial law

Accredited investor

An accredited or sophisticated investor is an investor with a special status under financial regulation laws.

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In banking and finance, an amortizing loan is a loan where the principal of the loan is paid down over the life of the loan (that is, amortized) according to an amortization schedule, typically through equal payments. Syndicated loan and amortizing loan are loans.

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Arbitrage

In economics and finance, arbitrage is the practice of taking advantage of a difference in prices in two or more marketsstriking a combination of matching deals to capitalize on the difference, the profit being the difference between the market prices at which the unit is traded.

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Bank

A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans.

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Bond credit rating

In investment, the bond credit rating represents the credit worthiness of corporate or government bonds.

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Bond fund

A bond fund or debt fund is a fund that invests in bonds, or other debt securities.

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Bond market

The bond market (also debt market or credit market) is a financial market in which participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market.

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Book building

Book building is a systematic process of generating, capturing, and recording investor demand for shares.

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Borrowing base

Borrowing base is an accounting metric used by financial institutions to estimate the available collateral on a borrower's assets in order to evaluate the size of the credit that may be extended.

See Syndicated loan and Borrowing base

Closed-end fund

A closed-end fund, also known as a closed-end mutual fund, is an investment vehicle fund that raises capital by issuing a fixed number of shares at its inception, and then invests that capital in financial assets such as stocks and bonds.

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Club deal

A club deal, in finance, refers to a leveraged buyout or other private equity investment that involves two or more private equity firms.

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Collateral (finance)

In lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan. Syndicated loan and collateral (finance) are credit and loans.

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Collateralized loan obligation

Collateralized loan obligations (CLOs) are a form of securitization where payments from multiple middle sized and large business loans are pooled together and passed on to different classes of owners in various tranches. Syndicated loan and Collateralized loan obligation are loans.

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Commercial bank

A commercial bank is a financial institution that accepts deposits from the public and gives loans for the purposes of consumption and investment to make a profit.

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Commercial paper

Commercial paper, in the global financial market, is an unsecured promissory note with a fixed maturity of usually less than 270 days.

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Corporate bond

A corporate bond is a bond issued by a corporation in order to raise financing for a variety of reasons such as to ongoing operations, mergers & acquisitions, or to expand business.

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Corporation

A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law as "born out of statute"; a legal person in a legal context) and recognized as such in law for certain purposes.

See Syndicated loan and Corporation

Cov-lite

Cov-lite (or "covenant light") is financial jargon for loan agreements that do not contain the usual protective covenants for the benefit of the lending party. Syndicated loan and cov-lite are loans.

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Credit rating

A credit rating is an evaluation of the credit risk of a prospective debtor (an individual, a business, company or a government), predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting. Syndicated loan and credit rating are credit.

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Debtor in possession

A debtor in possession or DIP in United States bankruptcy law is a person or corporation who has filed a bankruptcy petition, but remains in possession of property upon which a creditor has a lien or similar security interest.

See Syndicated loan and Debtor in possession

Default (finance)

In finance, default is failure to meet the legal obligations (or conditions) of a loan, for example when a home buyer fails to make a mortgage payment, or when a corporation or government fails to pay a bond which has reached maturity. Syndicated loan and default (finance) are credit and loans.

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Duration (finance)

In finance, the duration of a financial asset that consists of fixed cash flows, such as a bond, is the weighted average of the times until those fixed cash flows are received.

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Equity (finance)

In finance, equity is an ownership interest in property that may be offset by debts or other liabilities.

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Euribor

The Euro Interbank Offered Rate (Euribor) is a daily reference rate, published by the European Money Markets Institute, based on the averaged interest rates at which Eurozone banks borrow unsecured funds from counterparties in the euro wholesale money market (or interbank market).

See Syndicated loan and Euribor

Eurozone

The euro area, commonly called the eurozone (EZ), is a currency union of 20 member states of the European Union (EU) that have adopted the euro (€) as their primary currency and sole legal tender, and have thus fully implemented EMU policies.

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Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks.

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Federal Reserve Board of Governors

The Board of Governors of the Federal Reserve System, commonly known as the Federal Reserve Board, is the main governing body of the Federal Reserve System.

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Financial capital

Financial capital (also simply known as capital or equity in finance, accounting and economics) is any economic resource measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provide their services to the sector of the economy upon which their operation is based (e.g.

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Financial institution

A financial institution, sometimes called a banking institution, is a business entity that provides service as an intermediary for different types of financial monetary transactions.

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Financial law

Financial law is the law and regulation of the commercial banking, capital markets, insurance, derivatives and investment management sectors.

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Financial market participants

There are two basic financial market participant distinctions, investors versus speculators and institutional versus retail.

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Financial modeling

Financial modeling is the task of building an abstract representation (a model) of a real world financial situation.

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The Financial Services Authority (FSA) was a quasi-judicial body accountable for the regulation of the financial services industry in the United Kingdom between 2001 and 2013.

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Flex language

Flex language is flexibility inserted into a syndicated loan contract that allows the arranging bank to alter the terms of the borrowing in order to attract enough lenders to finance the loan. Syndicated loan and flex language are loans.

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Guarantee

A guarantee is a form of transaction in which one person, to obtain some trust, confidence or credit for another, agrees to be answerable for them.

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Hedge fund

A hedge fund is a pooled investment fund that holds liquid assets and that makes use of complex trading and risk management techniques to improve investment performance and insulate returns from market risk.

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High-yield debt

In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies.

See Syndicated loan and High-yield debt

Institutional investor

An institutional investor is an entity that pools money to purchase securities, real property, and other investment assets or originate loans.

See Syndicated loan and Institutional investor

Insurance

Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. Syndicated loan and Insurance are financial law.

See Syndicated loan and Insurance

Investment banking

Investment banking is an advisory-based financial service for institutional investors, corporations, governments, and similar clients.

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Jurisdiction

Jurisdiction (from Latin juris 'law' + dictio 'speech' or 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice.

See Syndicated loan and Jurisdiction

Lead arranger

The lead arranger, or the mandated lead arranger (MLA), is the investment bank or underwriter firm that facilitates and leads a group of investors in a syndicated loan for major financing. Syndicated loan and lead arranger are loans.

See Syndicated loan and Lead arranger

Letter of credit

A letter of credit (LC), also known as a documentary credit or bankers commercial credit, or letter of undertaking (LoU), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods. Syndicated loan and letter of credit are credit and financial law.

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Leverage (finance)

In finance, leverage, also known as gearing, is any technique involving borrowing funds to buy an investment.

See Syndicated loan and Leverage (finance)

Leveraged buyout

A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money (leverage) to meet the cost of acquisition.

See Syndicated loan and Leveraged buyout

Loan Market Association

The Loan Market Association (LMA) was formed in December 1996 and is based in London, UK.

See Syndicated loan and Loan Market Association

Mergers and acquisitions

Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, business organizations, or their operating units are transferred to or consolidated with another company or business organization.

See Syndicated loan and Mergers and acquisitions

Mezzanine capital

Mezzanine capital is a type of financing that sits between senior debt and equity in a company's capital structure.

See Syndicated loan and Mezzanine capital

Money market fund

A money market fund (also called a money market mutual fund) is an open-end mutual fund that invests in short-term debt securities such as US Treasury bills and commercial paper.

See Syndicated loan and Money market fund

Mutual fund

A mutual fund is an investment fund that pools money from many investors to purchase securities.

See Syndicated loan and Mutual fund

Office of the Comptroller of the Currency

The Office of the Comptroller of the Currency (OCC) is an independent bureau within the United States Department of the Treasury that was established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and federal thrift institutions and the federally licensed branches and agencies of foreign banks in the United States.

See Syndicated loan and Office of the Comptroller of the Currency

Open-end fund

Open-end fund (or open-ended fund) is a collective investment scheme that can issue and redeem shares at any time.

See Syndicated loan and Open-end fund

Participation loan

Participation loans are loans made by multiple lenders to a single borrower. Syndicated loan and Participation loan are credit and loans.

See Syndicated loan and Participation loan

Pension fund

A pension fund, also known as a superannuation fund in some countries, is any program, fund, or scheme which provides retirement income.

See Syndicated loan and Pension fund

Private equity

Private equity (PE) is capital stock in a private company that does not offer stock to the general public.

See Syndicated loan and Private equity

Pro forma

The term pro forma (Latin for "as a matter of form" or "for the sake of form") is most often used to describe a practice or document that is provided as a courtesy or satisfies minimum requirements, conforms to a norm or doctrine, tends to be performed perfunctorily or is considered a formality.

See Syndicated loan and Pro forma

Refinancing

Refinancing is the replacement of an existing debt obligation with another debt obligation under a different term and interest rate.

See Syndicated loan and Refinancing

Regional bank

A regional bank is a depository institution, such as a bank, savings and loan, or credit union, which is larger than a community bank and operates below the state level, but not so large that it would operate either nationally or internationally.

See Syndicated loan and Regional bank

Revolving credit

Revolving credit is a type of credit that does not have a fixed number of payments, in contrast to installment credit. Syndicated loan and Revolving credit are credit.

See Syndicated loan and Revolving credit

S&P Leveraged Loan Index

Morningstar LSTA US Leveraged Loan Index (formerly S&P Leveraged Loan Indexes, S&P LL indexes) are capitalization-weighted syndicated loan indexes based upon market weightings, spreads and interest payments. Syndicated loan and S&P Leveraged Loan Index are loans.

See Syndicated loan and S&P Leveraged Loan Index

Second lien loan

The vast majority of all second lien loans are senior secured obligations of the borrower. Syndicated loan and second lien loan are credit and loans.

See Syndicated loan and Second lien loan

Security agreement

A security agreement, in the law of the United States, is a contract that governs the relationship between the parties to a kind of financial transaction known as a secured transaction.

See Syndicated loan and Security agreement

Set-off (law)

In law, set-off or netting is a legal technique applied between persons or businesses with mutual rights and liabilities, replacing gross positions with net positions. Syndicated loan and set-off (law) are financial law.

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The Shared National Credit Program is a review of large syndicated bank loans in the United States conducted by the Board of Governors of the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency.

See Syndicated loan and Shared National Credit Program

SOFR

Secured Overnight Financing Rate (SOFR) is a secured overnight interest rate.

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Special-purpose entity

A special-purpose entity (SPE; or, in Europe and India, special-purpose vehicle/SPV; or, in some cases in each EU jurisdiction, FVC, financial vehicle corporation) is a legal entity (usually a limited company of some type or, sometimes, a limited partnership) created to fulfill narrow, specific or temporary objectives.

See Syndicated loan and Special-purpose entity

Staple financing

The term staple financing describes a form of investment banks pre-arranged financing package offered to potential bidders during an acquisition.

See Syndicated loan and Staple financing

Structured investment vehicle

A structured investment vehicle (SIV) is a non-bank financial institution established to earn a credit spread between the longer-term assets held in its portfolio and the shorter-term liabilities it issues.

See Syndicated loan and Structured investment vehicle

Substitute good

In microeconomics, substitute goods are two goods that can be used for the same purpose by consumers.

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Term sheet

A term sheet is a bullet-point document outlining the material terms and conditions of a potential business agreement, establishing the basis for future negotiations between a seller and buyer.

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Tranche

In structured finance, a tranche is one of a number of related securities offered as part of the same transaction.

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Trustee

Trustee (or the holding of a trusteeship) is a legal term which, in its broadest sense, is a synonym for anyone in a position of trust and so can refer to any individual who holds property, authority, or a position of trust or responsibility for the benefit of another.

See Syndicated loan and Trustee

Underwriting

Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liability arising from such guarantee.

See Syndicated loan and Underwriting

1998 Russian financial crisis

The Russian financial crisis (also called the ruble crisis or the Russian flu) began in Russia on 17 August 1998.

See Syndicated loan and 1998 Russian financial crisis

References

[1] https://en.wikipedia.org/wiki/Syndicated_loan

Also known as Loan syndication, Sub-participation, Syndicated Loans, Syndicated bank loan, Syndicated lending.

, Office of the Comptroller of the Currency, Open-end fund, Participation loan, Pension fund, Private equity, Pro forma, Refinancing, Regional bank, Revolving credit, S&P Leveraged Loan Index, Second lien loan, Security agreement, Set-off (law), Shared National Credit Program, SOFR, Special-purpose entity, Staple financing, Structured investment vehicle, Substitute good, Term sheet, Tranche, Trustee, Underwriting, 1998 Russian financial crisis.

Syndicated loan, the Glossary

Table of Contents

See also

Financial law

References