A syndicated loan, or a syndicated bank facility, is financing offered by a group of lenders called a syndicate who work together to provide funds for a borrower.
In cases of syndicated loans, there is typically a lead bank or underwriter, known as the arranger, the agent, or the lead lender. The lead bank may put up a proportionally bigger share of the loan, or it may perform duties such as dispersing cash flows among the other syndicate members and administrative tasks.
To open a Syndication Deal, it is mandatory to get the liability approved. The purpose of this transaction is to send an e-mail to the Account Manager of the Syndication Party and get the approval to open the deal. If a Syndication Party needs to be modified, it can only be done through this transaction before a deal is opened.
In this transaction, the Syndication Percentage is provided, which is then used to calculate the syndication amount with respect to the primary amount of the deal. Maturity date in the secondary side on panel ‘Syndication Liabilities’ is populated either from the primary side or the syndication deal depending on liability type.
For Liability type ‘AVL’, ‘Latest Possible Due Date’ is defaulted into field 'Maturity Date'.
For Liability type ‘DPZ’ or ‘FIN’, 'Maturity Date' of the primary contract is defaulted into 'Maturity Date' on the Syndication Liabilities Details panel.
If either 'Maturity Date' on the primary side or ‘Latest Possible Due Date’ on the secondary side is amended, it will be defaulted in the syndication liabilities accordingly.
If the checkbox 'Applicable for all Liabilities' is checked, the liability amount will be automatically calculated based on the syndication percentage provided for all types of liabilities
(e.g. Contingent Liability, Financing Liability, etc.) in further transactions (e.g. Booking Handling, Amending, etc.).
To create liability approval for a Syndication Deal, SDTOPR transaction is used.
This transaction can be used to amend the details any number of times before the deal is opened through transaction Creating a Syndication Deal (SDTOPN), the Liability Confirmation transaction can be used for a particular deal to amend the approval details.
Select it from the menu item[Other Products -> Syndication -> Syndication Deal > Liability Approval].
When you have made your changes, click on the ( ) Save function to save all the the data entered in the transaction to the database.