Merger and purchase (M&A) and recapitalization loans will probably carry fees that are high because will bankruptcy leave financings and restructuring discounts for struggling entities. Seasoned leveraged issuers, in contrast, spend reduced fees for re-financings and add-on deals.
Because investment-grade loans are infrequently drawn down and, therefore, provide drastically lower yields, the ancillary company that banking institutions desire to see can be as important as the credit product in organizing such deals, particularly because numerous acquisition-related financings for investment-grade businesses are big, pertaining to the pool of possible investors, which may comprise entirely of banking institutions.
Exactly How are Loans Syndicated?
The syndications process moves to the next phase once the loan issuer (borrower) picks an arranging bank or banks and settles on a structure of the deal.