Financial sponsor/ syndicated loans services market includes finding lenders to finance large projects. The borrower can be a company, or government. The loan can be of fixed amount, credit line or a combination of both. Investment banking companies either charge clients fixed fees or a proportion of the loan value.
The global financial sponsor/syndicated loans market was valued at $18.3 billion in 2017. North America was the largest geographic region accounting for $9.4 billion or 51.7% of the global market. USA was the largest country accounting for $5.8 billion or 31.9% of the global financial sponsor/syndicated loans market.
Blockchain distributed ledger system is trending in the syndicated loans market as a platform to track activities and meet compliance requirements in a better way. It helps the banks to spread out tasks like local compliance and link them to a single customer block. This system also helps to reduce the complexity and efforts required to comply with local taxation and lowers the cost of meeting regulatory requirements of syndicated lending.
The companies covered are JPMorgan, Barclays, Goldman Sachs, Credit Suisse, and Bank of America Merrill Lynch.
The countries covered are USA, China, Germany, Brazil, Japan, UK, Spain, Russia, France, Australia, Italy, India and rest of the world.
The financial sponsor/ syndicated loans market is segmented into Underwritten Deal; Club Deal; Best-Efforts Syndication Deal.
Underwritten Deal is an underwriting agreement is a contract between a group of investment bankers who form an underwriting group or syndicate, and the issuing corporation of a new securities issue. The underwriting agreement contains the details of the transaction.
Club Deal is a private equity buyout or the assumption of a controlling interest in a company that involves several different private equity firms. This group of firms pools its assets together and makes the acquisition collectively.
Best-Efforts Syndication Deal tells that the lead agent does not commit or guarantee the entire loan amount. Any undersubscribed portion of the loan will be filled up by taking advantage of the changes in market conditions. If the loan continues to be undersubscribed, the borrower may be forced to accept a lower loan amount or the loan will be canceled entirely.