Syndication meaning

Points to consider What is the most appropriate method of transfer? Consider: Think about whether you are transferring rights alone (eg drawn commitments) or also obligations (eg undrawn commitments). An assignment passes only rights, whereas a novation passes both rights and obligations. Novation is usually favoured for loan transfers because it conveys rights and duties together. If assignment is adopted, the obligations can be moved by novation. For more detail, see Practice Note: Transferring a loan by assignment. Whether consent can be obtained from the borrower? By law, an assignment does not require the counterparty’s consent. However, the facility agreement will often require borrower consent for an assignment, and for a novation as well. Sub-participation is sometimes used to transfer loans on syndicated transactions where borrower consent cannot be obtained. That said, some deals may still require borrower consent for sub-participation. Whether the intention is for the transfer to be kept confidential from...

In this issue: Sustainable finance and ESG round–up Lending Security Sustainable finance Debt capital markets Derivatives Structured products and securitisation Regulation for derivatives lawyers Restructuring Daily and weekly news alerts New and updated content Useful information Sustainable finance and ESG round–up Sustainable finance and ESG weekly round–up Sustainable finance and ESG round–up Sustainable finance and ESG weekly round–up For a summary of this week’s Sustainable finance and ESG developments, see: Sustainable finance and ESG weekly round–up—18 April 2024. Lending LMA publishes guidance on primary delayed settlement compensation The Loan Market Association (LMA) has issued guidance on primary delayed settlement compensation, setting out a suggested timetable for stages in the syndication process and embedding fault-based delayed settlement compensation. The note aims to reconcile the differing priorities of stakeholders involved in syndication. See: LNB News 17/04/2024 68. Source: LMA issues Primary Delayed Settlement Compensation Guidelines to promote efficiency...

Abraaj Investment Management Ltd (in liquidation) and other companies v Kes Power Ltd and others [2026] EWHC 65 (Comm) What are the practical implications of this case? The recent High Court judgment in Abraaj Investment Management v Kes Power closely analyses assignment principles within secured lending. In particular, the court considers when estoppel can aid a lender confronted with defective or uncertain security. The ruling also explores several adjacent issues: the potential for assignments to be implied, whether ‘no assignment’ clauses are tempered by a reasonableness qualification, and matters of consideration in acknowledgements of notice. While estoppel provided the lender with a solution on the facts, the decision emphatically reinforces a fundamental point: only the entity to which the debt is actually owed should be the assignor. The realities of group operations can obscure the true creditor, meaning it is not always obvious which company holds the right to assign. Practitioners may act on client instructions regarding the identity of the assignor and include in legal opinions a...

Vietjet Aviation Joint Stock Company v FW Aviation (Holdings) 1 Ltd [2025] EWCA Civ 783 What are the practical implications of this case? In this Court of Appeal decision, the judges drew a firm line between a lender’s use of rights transferred to it by a security document and the separate power to enforce that security. A clause permitting an assignee to enforce the security only once an enforcement event has occurred did not, absent contrary wording, bar the lender from exercising the contractual rights that had been assigned. Accordingly, the contractual mechanism for assignment operated independently of the enforcement regime. On these facts, a lease termination notice issued to the contractual counterparty by the lender in its capacity as assignee was effective, even though no ‘enforcement event’ under the loan agreement had yet arisen. The ruling underscores the need for security documents to spell out clearly whether the lender can rely on assigned rights before the security becomes enforceable (or before any other specified trigger, such as...

Timing Loan transactions usually begin with the term sheet (also called heads of terms) alongside the mandate stage. In this early phase, the parties put confidentiality arrangements in place, settle the key deal terms, and clarify their respective roles. The duration of this stage can shift markedly, shaped by the deal’s nature and complexity. The level of detail in a term sheet also differs: sometimes it records only the principal commercial points, with matters such as representations and undertakings noted only briefly (eg ‘usual representations’). In other cases—particularly for specialist deals like leveraged finance—it can be highly detailed. Reaching agreement on a thorough term sheet at the outset can trim later time and cost when negotiating the loan and security documents. What happens during this stage of the transaction? The parties exchange confidential information At the very outset of a prospective deal, the parties seek to share information considered confidential and sensitive to decide whether to proceed with a potential transaction or relationship. To manage and...

This Practice Note reviews the principal finance participants actively engaged in a syndicated loan arrangement or syndicated loan facility. It examines the functions and obligations of the arranging bank, facility agent, security agent (also called the security trustee), the syndicate lenders and the issuing bank(s), with specific reference to the Loan Market Association (LMA) loan documentation forms. Loan Market Association documentation The LMA is the leading organisation within the European, Middle Eastern and African (EMEA) syndicated loan market across the region. Its aim is to enhance liquidity, efficiency and transparency across the primary and secondary syndicated loan markets. LMA documentation is developed following wide consultation with prominent loan practitioners and law firms, to reflect a shared consensus on documentation structures...

This Practice Note reviews the principal considerations around enforcing guarantees in a financing transaction, namely where a lender (most often a bank) has extended a loan to a corporate borrower that is supported by a guarantee from another group company of the borrower (eg the borrower’s parent company or one of its subsidiaries). It addresses the following questions: what claim does a lender have against a guarantor? by what means can a lender enforce a guarantee? how is enforcement approached where there are multiple guarantors? are there particular points to consider in syndicated transactions? are there any distinct considerations for guarantees given by individuals? The law regulating guarantees is complex and at times inconsistent; accordingly, this Practice Note is intended as a springboard for more detailed analysis. What is the nature of claim that a lender has against a guarantor? To determine the nature of the claim a lender has against a guarantor, it is necessary to look...

[ On headed notepaper of a potential syndicate member ] To: [ enter the complete name and address of the arranger ] [ enter date ] Dear [ enter the complete name of arranger ] Facility in [ enter currency ] [ enter amount ] to [ enter name of borrower ] (the Borrower) by [ enter name of Arranger ] (the Arranger) with [ enter name of Agent, as agent ] (the Agent)...

This deed is entered into on [ insert day and month ] 20[ insert year ] Parties [ insert name of Assignor ], a company incorporated in England and Wales with company number [ insert company number ], whose registered office is at [ insert address ] (the Assignor); and [ insert name of Assignee ], a company incorporated in England and Wales with company number [ insert company number ], whose registered office is at [ insert address ] (the Assignee). Background (A) The Assignor extended a loan facility to the Borrower (as defined below) on the terms and conditions set out in the Facility Agreement (as defined below). (B) The Assignee has agreed to acquire from the Assignor all of the Assignor's rights, title, benefit and interest in and under the Facility Agreement, in accordance with the terms of this Deed...

Add the following new clauses 11.4 to 11.8: Subject to clause 11.5, after Completion and notwithstanding this Agreement or the Articles, [ insert names of original investor/s ] (Syndicator) may transfer to any Syndicatee any Investor Shares [ and/or any Loan Notes ]. All other Parties consent and shall, so far as able, use their Company rights (as Shareholder and/or director) to give effect. Syndication proceeds only if: the Syndicator consults in good faith with the Board on the Syndicatee, where practicable (no veto); and the Syndicatee is a [ venture capital OR institutional investor ] [ who is a full member of either the British Private Equity & Venture Capital Association or of the European Private Equity & Venture Capital Association ]. The Company bears reasonable Syndication costs. The Syndicatee confirms it has not relied on any information, advice, appraisal or investigation by/for the Syndicator, will assess matters itself, has no fiduciary...