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

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/