The lead arranger assigns syndicate roles and titles. Sub-underwriters and participant lenders are generally awarded titles based on the amount of their commitment and in the phase of syndication when they participate. The number and titles of syndicate participants varies among syndicates according to the size and complexity of the loan as well as the awarding of titles for league table status.
“Lead arranger”, “joint-lead arranger”, “co-lead arranger” and, in the US market, “co-agent” are syndicate titles for co-underwriters, designated during the sub-underwriting phase of primary syndication. They underwrite the financing and accept the syndication risk in exchange for a portion of the underwriting spread and a closing fee as well as league table status. They also receive prominent placement on all marketing materials relating to the facilities.
“Arranger”, “co-arranger” and “lead manager” are largely ceremonial titles awarded to participant lenders for tickets in order of decreasing size usually during general syndication for relatively large retail commitments in exchange for a closing fee. They do not underwrite and do not receive any of the underwriting spread. Instead, these banks are primarily interested in generating loans while staying within regulatory lending limits, diversifying credit exposures, and lending in markets where they lack origination capabilities.
Co-lenders signing the primary loan documents at [syndication] closing are granted co-underwriter privileges, such as primary market pricing, co-agent and co-underwriter titles.
“Manager”, “co-manager” or, simply, “participant” is a designation used for a participant lender as junior member in general syndication that takes the smallest ticket available. They (small banks, institutions, CDOs, hedge funds) only earn a margin over their cost of funds and do not receive any closing fee.