Syndicated Loans In Denmark

Bilateral and Syndicated Loans

Loan transactions are commonly divided into bilateral and syndicated loans. A basic "plain vanilla" loan is a loan provided by a single lender to a single borrower. This is commonly referred to as a bilateral loan. In order to spread the risk, lenders may join forces in a syndicated loan. The syndicated loan market is the predominant market for large corporations to receive large-cap loans from banks and institutional lenders. In a syndicated loan, two or more banks agree jointly to make a loan to a borrower. Each member of the syndicate maintains a separate claim against the corporate borrower, although there is a single loan agreement in place. The lenders may be divided into two separate groups. The first group consists of the senior syndicate members and is led by one or several lenders acting as mandated lead arrangers (MLA). The MLAs are mandated by the borrower to arrange the syndicate prepared to advance funds at the terms