Syndicated loans are complex financial transactions that involve several parties. But the process doesn’t have to feel overwhelming. Your Truist relationship manager serves as your primary strategic advisor throughout the process. They can coordinate a team from across Truist that spans syndicated finance, risk management, credit analysis, and even industry specialization to navigate any obstacles specific to your industry.
Although loan syndicates can vary from one deal to the next, these are the main parties that play a role in the process.
Arranging bank: The arranging bank is responsible for organizing the funding based on the specific loan term agreements, such as loan amount, repayment schedule, and loan duration. The arranging bank carries most of the loan and distributes cash flows among the other lenders within the syndicate.
Agent: The agent has a contractual obligation to serve both the borrower and the lenders within a syndicated loan. This administrative role provides syndicate participants with the information that allows them to exercise their rights under the loan agreement, but the agent is not required to advise either the borrower or the lenders.
Trustee: The trustee holds the security of the borrower’s asset on behalf of the lenders. If a loan default occurs, the trustee has fiduciary duty to the lenders to enforce the security on their behalf.
