Syndicated Loan
Short definition
A syndicated loan is a facility shared by several banks under one contract. It is used for size, risk sharing and market discipline; documentation is heavier than a bilateral line.
Detailed explanation
The MLA/bookrunner builds the structure; participants take shares. Unanimous versus majority covenant amendments slow waivers. Transferability makes the margin visible in the secondary market.
A club deal is narrower and relationship-heavy. Cross-default spreads a problem with one bank across the pack.
Why it matters for the CFO
A large wall and M&A often need a syndicate. Waiver cost is higher than with one bank.
How to read it
More lenders is not more flexibility; it is slower decisions. Oversubscription shows appetite, not price.
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What to learn next
Definitions are educational. They are not investment, credit or tax advice.