# Syndicated loan (syndicated credit, consortium loan, participation loan)

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- Post ID: 590352
- Modified: 2023-07-25T21:12:54+00:00
- Language: en

## Definition

Several banks, usually internationally active and already attuned to each other in this business, join together on a case-by-case basis to lend to an address with very high credit needs, with each institution contributing a certain portion of the sum extended to the borrower. - This form of credit allows the individual bank - to determine a discretionary portion (amount of finance) of the loan in its entirety, - to spread its risk geographically and in terms of economic sectors, - to reduce its costs for monitoring the borrower, because corresponding tasks are usually precisely divided among the participants of the - often internationally formed - consortium (syndicate), and - to achieve a higher profit than is normally possible in other transactions. - See alliances, cross-border, bought deal, flex clause, gestion commission, intercreditor agreement, investment banking, participation business, project finance, risk, operational, risk transfer, risk transformation, banking, syndicate, partial accounting, securitization. - Cf. ECB Monthly Bulletin, August 2002, p. 57. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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