syndicated facility

syndicated facility
United Kingdom
A loan or other credit facility provided by more than one lender to a borrower (or associated borrowers) under the terms and conditions of one facility agreement.
A syndicated loan is a loan provided under a syndicated facility but the expression syndicated loan is often used interchangeably with syndicated facility, even when the syndicated facility comprises loan and other facilities (such as a letter of credit facility).
Syndication is the process by which one lender transfers, usually by novation, all or part of its commitment under the syndicated facility to another lender or lenders. This reduces the original lender's exposure and its reward. Together, the facility lenders are known as the syndicate.
An agent bank is appointed to liaise with the borrower on behalf of the syndicate and to receive and distribute payments amongst the parties.
Related links

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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