Meanings of Loan Syndication
Loan Syndication is a practice in which several banks each lend an amount of money to a borrower at the same time and for the same purpose. The banks participating in the loan syndication cooperate with each other for the duration of the project, even if they are otherwise competitors. Bank syndicates usually only lend large amounts of money that the individual banks could not afford easily. Loan syndication is a temporary arrangement between the banks.
In other word, Syndicated loan is a loan provided by a group of lenders, usually commercial or investment banks. Syndicated loan deals are typically structured and administered by a lead arranger that initially underwrites the transaction and guarantees the total commitment, and later subscribes a given amount of the commitment to other banks in the syndicate.
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