In a facility agreement, the finance parties are the parties that are designated as agent, arranger(s) and lenders.
“Finance Party” means the Agent, the Arranger or a Lender.
The mandated lead arranger (MLA) is the bank appointed through the grant of a mandate by a borrower or the sponsor on behalf of the parent to arrange and syndicate the senior facilities. As lead arranger, the commercial or investment bank advises a borrower on the type of financing it requires and organizes and syndicates the financing on the borrower’s behalf, on the basis of the negotiated terms and conditions set out in the term sheet and mandate letter. Lead arrangers likely have an established relationship with the borrower or sponsor.
Arrangers underwrite all or part of the financing, thereby assuring the borrower receipt of the required amount of financing. In multilateral syndicated financing, the arranger is often also a major lender and the facility agent. LMA facility agreements are designed to allow for one or more arrangers.
Loan syndication starts with the borrower awarding the mandate to one or more arrangers to syndicate the financing.