Syndicated loan – A syndicated loan (or "syndicated facility") is a large loan in which a group of banks work together to provide funds for a borrower. There are typically more than 2 banks involved in a syndication. There is usually one or more lead bank that takes a percentage of the loan and syndicates the rest to other banks. A syndicated loan is the opposite of a bilateral loan, which only involves one borrower and one lender (often a bank or financial institution.) A syndicated loan is a much larger and more complicated version of a participation loan.
Arranger – Arranger is typically a bank responsible for preparation of the deal, negotiating the loan terms with the borrower and syndicating it to the other participants. The Arranger can also act as an agent or one of the syndication participants.
Syndication participant – Syndication participant is one of banks providing the syndicated facility
Agent – Agent is the bank responsible for the loan management after the facility is signed
Margin – Margin is a fixed part of the floating interest rate. For example, if the rate is 50bp over LIBOR, the Margin is 50bp
Basis rate – Basis rate is the indicator, which the margin is added to or subtracted from, to determine the final rate of the loan.
Bridge loan -A bridge loan is interim financing for an individual or business until permanent or the next stage of financing can be obtained. Money from the new financing is generally used to "take out" (i.e. to pay back) the bridge loan, as well as other capitalization needs.
Bridge loans are typically more expensive than conventional financing because of a higher interest rate, points and other costs that are amortized over a shorter period, and various fees and other "sweeteners" (such as equity participation by the lender in some loans). To compensate for the additional risk the lender may require cross-collateralization and a lower loan-to-value ratio. On the other hand they are typically arranged quickly with relatively little documentation.
Subordinated loan - Loan which ranks after other debt. These loans will normally be repayable after other debt has been serviced and are thus more risky from the lender’s point of view.
Club loan – Loan which is syndicated by the borrower, acting as arranger and agent of its own deal and using its relationship banks. There may be different structures, but documentation will be identical with the different banks.
Multi-currency loan - Financing provided with the option of using different currencies.
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