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What is a syndication agreement?

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A syndication agreement is a contract between the arranger and the other participants in the syndication of a lease that addresses the structure of the syndicate, how the transaction is to be marketed, how fees are apportioned to the participants as well as the relationship, rights and responsibilities of the syndicate participants to one another – not the terms and conditions of the lease itself.  The syndication agreement also addresses priorities in the event of lessee default, insolvency, bankruptcy, casualty, and the validity and enforceability of the underlying lease documents during syndication.  Once the basics of credit underwriting, lease documentation and other business issues have been negotiated, it is necessary to record these and other terms in a comprehensive syndication agreement.

A mechanism in a syndication agreement may provide for the automatic assignment of a lease to the participants immediately upon their payment of the purchase price of the leased asset to the lessor or the vendor.  This precludes the need to sign a separate lease assignment in connection with each syndicated lease.

Syndication Agreement
Syndication Agreement

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Syndication Agreement

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