Publisher's Synopsis
The syndicated loan is one of the most important and flexible instruments in international financial markets. It is the ideal instrument for borrowers in emerging markets where the local currency is often not convertible, there is a lack of efficient intermediation of funds via the banking system, interest rates and inflation are often high, maturities are short and the size of available funds is limited.;Recent years have seen a huge increase in demand for funding from corporates in emerging markets. This is due to economic growth, an increasingly global outlook, and the steady increase in privatization in emerging economies. At the same time, the presence of technological, managerial and financial expertise, both imported from developed markets and, increasingly, developed locally, has attracted more financial institutions and investors to these regions. Increased demand for funding, greater ability to stimulate financings and the advantages of syndicated loans for many emerging market borrowers have resulted in the recent increase in growth of this type of financing.;This book is designed as a guide for emerging market borrowers. It is a useful companion for emerging market borrowers in terms of explaining the markets, the instruments and the processes involved in raising finance through a syndicated loan. Part 1 comprises four chapters explaining the advantages and disadvantages of syndicated loans, detailing the types of syndicated credit facility that are available, giving an overview of the syndicated loan market, and explaining the role of term sheets in these transactions. The five chapters of part 2 examine the type of borrower that can benefit from these instruments, discusses the role of the arranger and its selection, describe the process of syndicating the loan and closing the book, discuss the key role of documentation and the selection of a law firm to manage it, and examine the activation and administration of the facility and the issues involved in seeking amendments and waivers. Part 3 contains a case study of a basic plain vanilla structure. Appendices 1-4 discuss the secondary markets, defaults and key clauses in standard documentation and give a summary of recent activity in emerging markets.