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Loan Syndication

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How is real estate investment finance subordinated?

Real estate investment finance commonly uses structural subordination (senior/mezzanine structure), where each obligor is increasingly removed from the properties. A single-currenc…


How is mezzanine debt subordinated?

While in the US market, mezzanine finance is typically provided by means of high-yield bonds, in Europe it is usually a senior loan facility secured on a second-ranking basis to th…


How is LMA leveraged finance structured?

LMA leverage documents anticipate in a capital structure comprising various layers of funding with increasing subordination as follows: Bridge financing advanced solely to complete…


How is leveraged finance tranched?

US leveraged credit agreements commonly contain a revolving credit facility, a senior secured first-lien amortizing Term Loan A (TLa), usually held by participant banks, and a seco…


How is commercial real estate investment financing structured?

The LMA REF Document is commonly used for investing in commercial real estate in the UK and other European markets.  It serves as the standard for bilateral and syndicated transact…


How is commercial real estate investment finance secured?

Credit assessment of real estate investment facilities is based primarily on the loan-to-value of the properties and the net operating income that the properties generate. Special…


How is a loan’s expected loss determined?

The quality of the credit approval process is determined by the best possible identification and evaluation of the credit risk resulting from a possible exposure.  Credit risk is t…


How do lenders join syndications?

To join a syndicated transaction during general syndication, lenders/investors submit a subscription (“ticket”).  If they receive allocation of any of the amount subscribed for, th…


How are syndicates structured?

A syndicate is a group of lenders formed on a temporary basis to participate in a financing transaction, usually in order to underwrite the facility and share the credit and syndic…


How are syndicates structured?

Where sub-underwriting is desired, syndicate structuring starts when lead arrangers solicit sub-underwriting commitments from prospective co-underwriters.  Through sub-underwriting…


How are syndicates organized?

Where sub-underwriting is desired, syndicate structuring starts when lead arrangers solicit sub-underwriting commitments from prospective co-underwriters.  Through sub-underwriting…


How are loan trades documented?

A secondary market supports syndicated loans after syndication closing.  Only few loans do not permit secondary trading or transferability, such as club loans. In the US loan marke…


How are assignment and participation treated?

An “assignment” under New York law is the legal term used to refer to the transfer of rights, such as the right to receive payments on a loan, while “delegation” is the legal term…


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