Syndicated Loan

A loan presented by a group of moneylenders who work organized to deliver funds for a single debtor. The borrower could be a company, a large scheme or a government. The loan may include fixed sums, a credit line, or a mixture of the two.
Also known as a syndicated bank flair. The main goal of syndicated lending is to blowout the risk of a debtor default across numerous lenders (such as banks) or institutional investors like pensions funds and privet funds. Because syndicated loans tend to be much larger than normal bank loans, the risk of even one borrower defaulting could cripple a single lender. Syndicated loans are also used in the leveraged buyout community to fund large corporate seizures with mainly debt funding.
Syndicated loans can be made on a best determination basis, which means that if enough investors can’t be found, the amount the borrower accepts will be lower than originally expected. These loans can also be divided into dual tranches for banks (who fund standard revolvers or outlines of credit) and official investors (who fund fixed-rate term loans).