Make A Formidable Presence Using Debt Syndication Services

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The true definition of the “debt syndication”, as per the encyclopedia of banking and finance (EBF), “syndication” means a temporary association of parties for financing and execution of some specific business purpose. It also defines the “Syndicated Loan” as loans extended by multiple banks where the overall credit involved exceeds an individual lender’s legal lending or other limits.

Debt syndication is undoubtedly the need of the hour for all banks and corporate. It helps the corporation to make the fundraising through structured financial products which cater to their financial requirements from the initiation of projects to their expansion and modernization. In other and simple words, we can say that it is a loan offered by a group of lenders (called a syndicate) who work together to provide funds for a single borrower. The borrower could be a corporation, a large project, or a sovereignty such as a government.
The scope of loan syndication covers both, the fund bases as well as the non fund based services. The loan may involve fixed amounts, accredit line or it can be a combination of both. ...
... The interest rates can be fixed for the term of the loan or floating based on the benchmark rate. Typically, there is a lead bank or underwriter of the loan, known as the “arranger”, “agent”, or “lead lender”. This lender may be putting up a proportionally bigger share of the loan, or perform duties like dispersing cash flows amongst the other syndicate members and administrative tasks.

The process of debt syndication requires strong knowledge and expertise combined with the excellent relationships with banks and analytical ability to bring the clients the best deals in the least time. The main goal of this is to spread the risk of a borrower default across multiple lenders such as banks or institutional investors like pension funds and hedge funds. Because these loans are much larger than the standard bank loans, the risk of even one borrower defaulting could cripple a single lender. These loans are also used in the leveraged buyout community to fund large corporate takeovers with primarily debt funding.

These loans can be made on “best efforts” basis, which means that if enough investors can’t be found, the amount the borrower receives will be lower than originally anticipated.
The distressed debt market in India is presenting banks, and funds with new opportunities and challenges. The corporation with financial turnaround objectives is exploring ways to structure their capital and resolve debt overhang with innovative structures to improve evaluations for stakeholders. Dollar sprout assists these corporations in working out a comprehensive restructuring and a modeling plan which includes working out strategies to unlock the value of assets or business and/ or financial restructuring of liabilities. They leverage on the wide network of investors, which dollar sprout has access to and assist corporations to raise funds for implementing turnaround strategies and financial restructuring of liabilities. Their debt syndication services wing encompasses funding activities for diverse business requirements of corporations. They assist corporations to leverage on debt as an instrument to raise capital through structured financial products for various requirements, including project funding, expansions, and working capital and in structuring and syndicating funds for acquisitions.

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