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Product Name
BOC Syndicated Loan
Product Description
Syndicated Loan is a form of loan business in which two or more lenders jointly provide loans for one or more borrowers on the same loan terms and with different duties and sign the same loan agreement. Usually, one bank is appointed as the Agent Bank to manage the loan business on behalf of the syndicate members.
Product Features
• Large amount and long term. It can meet borrowers' demand for funds of long term and large amount. It is generally used for new projects loans, large equipment leasing and enterprises' M&A financing in transportation, petrochemical, telecommunication, power and other industries.
• Less time and effort for financing. It is usually the responsibility of the arranger for doing the preparation work of establishing the syndicate after the borrower and the arranger have agreed on loan terms by negotiation. During implementation of the loans, the borrower does not need to face all members of the syndicate, and relevant withdrawal, repayment of principal with interest and other management work related to the loans shall be fulfilled by the Agent Bank.
• Diversified approaches to syndicated loans. The same loan syndications can include many forms of loans, such as Term Loan, Revolving Loan, Standby L/C Line on requirements of the borrower. Meanwhile, the borrower can also choose GBP, USD, EUR, CAD, JPY and SGD and other currency or currency portfolio, if needed.
• It can help borrowers establish a good market image. Successful establishment of the syndicate comes from the participants' full recognition of the borrower's financial and operational performance, by which the borrower can build up their reputation.
Eligible Applicants
Corporate – investment grade and non-investment grade.
Borrowers who require long-term and large-amount loan.
Borrowers with high reputation in the industry, whose operation ability as well as financial and technical strength are recognised by most banks.
Application Requirements
• The borrower/guarantor should be the legal persons of enterprises and public institutions.
• The borrower shall meet requirements of certain level after credit rating by our internal or other recognised rating agency;
• The borrower shall be large and medium enterprises or project companies with sound operation and finance as well as strong competition in respective industries, which shall be promising in the development.
• The borrower has established a regular and sound partnership with Bank of China Group.
• In the event of joining the syndicate set up by other banks, the arranger bank shall be a policy bank, state-owned holding bank or foreign bank with sufficient credit and operational strength.
Application Procedures
1. The relationship manager pays attention to the financing demands of customers;
2. Receive loan information/financing documents of customers;
3. Negotiate with customers to draft of the term sheet and financing structure;
4. Our Bank is officially appointed by the lead bank and the principal underwriting bank of syndicated loans;
5. Confirmation of the loan amount;
6. Determination of preparation schedule, organising strategy and invitation list of syndicates;
7. Prepare loan information memorandum and letter of syndicate invitation, and send out the invitation to relevant financial institutions;
8. Subscription amount undertaken by participants. Confirmation of the final loan limit of each loan syndication participant;
9. Syndicated participants agree to sign the loan agreement and guarantee agreement;
10. Sign agreements;
11. Work of the Agent Bank.
Required Documents
• Relevant information on the borrower and their shareholders and guarantors;
• Certificate of Incorporation and articles of association of the borrower;
• Recent three years and the latest independently audited annual report and accounts for the borrower;
• Purchase contracts, construction contracts, supply and sale contracts of project equipment if relevant.
• Other documents or information needed by the bank.
Gentle Reminder
Business roles of syndicated loan mainly involve Bookrunner, Mandate Lead Arranger, Lead Arranger, Participating Bank, Agent bank, Coordinator and other members, who will perform the duty, enjoy the right and assume the risk according to the contract or their respective lending proportion.
1. The Arranger, responsible for organisation and arrangement of the syndicated loan, is a bank or banks which undertake preparation of syndicate and distribution on commission of customers. The Arranger usually will underwrite the whole issue of syndicated loan.
2. The Mandate Lead Arranger underwrites a larger share of the syndicated loan, ranking the highest among Arrangers.
3. The Agent Bank refers to the position granted by the lead bank according to loan amount and level undertaken by each bank in the syndicated loan with larger amount and more participants. It's a bank responsible for establishing syndicate during the preparation stage. The Agent Bank are mainly responsible for organising the examination of loan projects and feasibility of syndicate establishment, discussing loan documents with the lead bank and finally signing the loan contract.
4. Participating Banks refer to the banks who accept invitation of the arranger to join the syndication and provide loans according to shares determined through negotiation. Differences with the managers: Less loan subscription, assume no responsibility for undertaking and other practical preparation of the syndicate.
5. The Agent Bank is selected by syndicate members and approved by the borrower during the loan period. After signing the loan agreement, the Agent Bank, on behalf of syndicate members, is responsible for withdrawal, repayment of principal with interest, post-loan management and other issues on loan management as well as communication between syndicate members and the borrower, handling contract breach, etc. in the light of terms of the loan agreement.
6. The coordinator refers to the bank, selected from lead banks, to supervise the whole syndicated loan and to partially undertaken preparation tasks of the bank syndicate.
7. Consultant refers to the bank appointed by the borrower during the syndicated loan period, which provides paid financial advisory service for the borrower to make correct loan decision in face of various quotations and loan terms provided by other banks so as to facilitate all the loan work.
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