Loan Syndication - Structuring & Documentation

Course Content

1. The Syndicated Loan MarketDownload
[a] Overview of Market Definitions, Statistics and Transaction Timetable
  • Definition & characteristics of a syndicated loan. Common structures, uses and key defining terminology
  • Review of the markets broken down by volumes, geographies, currencies, maturities, ratings, arrangers and investors
  • Survey of macro-economic factors affecting the market. Phases and milestones of the syndication process and Timetable
[b] Overview of Documentation
  • Loan Market Association (LMA) and others (e.g. LSTA)
  • Investment Grade & Leveraged Primary documentation
  • The Documentation cycle
[c] Mandate & Term Sheet
  • Types of syndicated facilities. Mandate letters
  • Confidentiality & NFR Letter. Term Sheet Practicalities
  • Role of Agent. Role of MLA/Arranger
  • Role of and rights of participating banks. Building a business as a participant bank
[d] Practicalities
  • Role of Agent. Role of MLA/Arranger
  • Role of and rights of participating banks. Building a business as a participant bank
Case study:
  • Assessment of the merits of an invitation to Participate
[e] Pricing a Syndicated Loan
  • Sources of information. Trade-offs between price, maturity and credit structure
  • Assessing market appetites
[f] Underwriting and Distribution Strategies
  • Sub underwriting
  • Syndication, Club
Case study:
  • Delegates are split into groups and asked to work on an invitation to underwrite an investment grade transaction based on specific scenarios.
    Tasks Include:
    • Evaluation of the invitation. Production & assessment of Comparables
    • Producing and refining a Bank Universe. Liquidity Analysis
    • Assessment of the other factors which can influence the
    • Decision. Presentation of the recommendation to Business & Credit
[g] Roles & Responsibilities
  • The role of the participating bank. Why does a bank become a participant?
  • What must a participant do – and not do?
  • What does a participant need from the arrangers?
  • Current market conditions for participants
[h] Responsibilities in a Syndication Unit
  • Functions required in a syndication unit. How to undertake the roles in a transaction
  • Systems, Market practice and sensitivities
2. Syndicating & Closing a Syndicated Loan – the role of an MLA/Bookrunner
Investor Materials – PIM, Due Diligence Reports, Bank Meeting
  • Data Room, Timetable
  • Private vs Public, Closing, Allocation, Free to Trade
Secondary Loan Trading
  • Development of the market, Key drivers, Main players
  • Settlement, Market practice
Case study:
  • Evaluating a secondary trading opportunity
The Loan Agreement
  • Detailed review of the LMA recommended forms
  • The key concepts in syndicated loan documentation including pari passu provisions and trigger points / default
  • Priority ranking. Different types of security
  • Clauses in security documentation
  • Granting and perfecting collateral. Asset-based transactions
3. Winning Mandates and Selling Down
The Corporate Treasurer’s Perspective
  • The issues and challenges from the borrower’s perspective
  • How to win mandates and build client loyalty. Techniques for managing bankers
Specialist Syndication Markets
  • Project & Infrastructure Finance. Leverage Finance
  • Real Estate. Financial Institutions. Emerging markets
Bidding for the Mandate
  • How to structure the syndicated deal
  • Analysing the right price. Bidding strategies
Case study:
  • Delegates will work in groups on a case study involving the assessment of an invitation to underwrite a structured financing. Delegates will use a summary term sheet to
    • Evaluate alternative syndication strategies Conduct a Comparables Analysis set up an Investor
    • Universe, complete a Liquidity Analysis. Yield calculation for brackets in a deal. Cost and usefulness of underwriting