18. Nov 2014   Business Recht Steuer Werbung

The Concept of Parallel Debt

Syndicated loans have two main purposes: (1) assembling a number of banks together in order to provide a significant amount of funding; and (2) trading the loan to other financial institutions in order to realize profit. Thus, in a typical syndicated loan the number and identity of the banks will vary and there will be a need for establishment of multiple securities in favor of each creditor.

The practice has come up with two solutions in order to avoid excessive costs, having creditors under the same loan with different securities and simplifying the administration of securities.. [mehr]