Syndicated Lending Techniques

This practical and highly interactive 3-day training course, which incorporates numerous case studies, provides delegates with a thorough understanding of the syndicated loan market, its process and potential, featuring: Extend origination skills with a focus on borrower's needs Utilise term sheets to distinguish between instruments and credit structures Review pricing process including alternative instruments, relative value and secondary loan market Examine distribution methodology in developing a syndicate Give a review of topical documentation issues Link the syndication process to the optimal structure of a syndications unit Explore dynamic tension between the parties involved, both internally and externally Course Background The European, Middle Eastern and African (EMEA) syndicated credit market enjoyed sustained growth until 2007 on the back of very strong demand from corporate borrowers and in support of growing leveraged and investment grade merger and acquisition activity. The credit crunch has had a severe impact on the ability of banks to continue lending at the same rate, with the result that transaction volumes in 2008 and 2009 have declined. However, the syndicated loan market remains one of the main sources of capital for a project and acquisition financings as well as providing on-going working capital facilities to major corporate and financial institutions. This means that to face up to the competition for mandates and to enjoy participation in these important transactions, it is essential for bankers and borrowers to be fully conversant with the techniques of syndicated lending. By taking full advantage of the syndicated loan market, some banks have managed to make headway in increasing their returns whilst still meeting the goals of the participating banks and offering borrowers competitive terms and conditions. Features of the syndicated loan market such as transaction size, speed of reaction and flexibility ensure that it continues to be one of the primary sources for borrowers looking to raise capital from the markets. This advanced level seminar will provide delegates with essential information needed to maximise rewards whilst mitigating the risks of syndicated lending. It will examine the needs of both borrowers and lenders involved in the origination, structuring, distribution and management of syndicated loans and link the process of executing a successful deal to the optimal design of a syndications unit. Suggested reading: Syndicated Lending – Practice and Documentation 5th Ed. Author and general editor Tony Rhodes published by Euromoney Books. Crucial issues to be addressed Overview and assessment of the market Comparison of loan and bond markets Understanding a borrower's financing needs Use of the term sheet and mandate letter Pricing a transaction Syndication strategy and roles Documentation update Pitching for mandates Structuring a syndications unit Who should attend Loan syndication originators and distributors Deal management team members Secondary market team members Bank relationship managers Senior loan agency staff Credit officers Corporate treasurers and assistant treasurers Non-bank investors Bond originators Debt capital market originators Delegates having attended the Euromoney course entitled "Syndicated Loans for Practitioners"
Day 1 Review of the market, using a self assessment technique, this session will cover Key features of the syndicated loan product Characteristics Definitions Overview of global markets Volumes and segments Geographies Players Preparing a term sheet Identifying the crucial features Meeting the borrower’s funding needs Pricing Structuring the transaction Documentation Strategy Flex Reading the market “Stretching the envelope” This session will also touch on the changes in capital adequacy requirements (Basel ll) and the growing importance of ratings for the loan market Case study: Evaluating a term sheet. Delegates will be split into groups and asked to evaluate selected term sheets from a borrower’s point of view. Each group will present its findings (role play). Syndication process and timetable Analysis of the phases Definition of the roles Day 2 Pricing a transaction Macro-economic factors Credit-liquidity cycle Critical components Sources of information Relative value Bidding and syndication strategies Alternative bidding strategies Liquidity analysis Fee splits Delegate exercise: Return calculations Guest presentation: Documentation Issues, Mr. Peter Avery,Partner, Clifford Chance Delegates will be provided with an update from leading international law firm Clifford Chance on recent developments in loan documentation Case study: Developing and articulating a credible syndication strategy. Delegates are given a scenario of a transaction where they will be required to produce 2 deliverables: the first is a presentation to the borrower of the proposed syndication strategy, the second is a presentation to the internal authorising committee (often a credit and/or portfolio committee) of a bank seeking to lead the deal. Delegates will be provided with all the necessary data to undertake this task which will build on the 2 previous sessions of the course. Day 3 Presentations from previous case study Delegates will deliver their findings of the previous session case study. Each presentation will be evaluated and critiqued Case study: Pitching for a mandate. Delegates will be asked to work in groups to respond to a Request For Proposal (RFP) from a major international borrower. In addition to presenting the proposal, the delegates will be required to address a number of other critical marketing points which have been covered earlier in this course. Each group will determine their underwriting commitment and syndication strategy based on guidelines provided to each group. They will be asked to present their proposal to the borrower (role play) and to explain how their institution will execute the transaction. Making the Pitch Delegates, in their groups, will make the pitch and the most attractive proposal will be awarded the mandate Establishing a syndications business Job functions Interactions both internal and external Evaluating performance Course summary and close