Bank titles and roles in a loan syndication deal?
Can someone people explain the roles that the bank play in each of these titles? How does fees get pay out to each of these roles? And, which one is the most important role?
Administrative agent
Revolving agent
Swingline Lender
Term agent
Co-collateral agent
Term joint bookrunners
Term joint lead arrangers
Revolving Joint Bookrunners
Revolving Joint Lead Arrangers
Syndication Agent
Joint Documentation Agents
On deal tombstone, banks usually use the word joint lead arranger, what does that mean? And, how do you know if it's lead left or right?
Is the title arranger and book-runner used interchangeably?
tldr: Admin agent is probably the only title that really means much . The agent is the lead bank, ultimately responsible for (and paid for) executing the deal. They advise the borrower, negotiate terms, present these terms to participating banks, complete legal documents, and coordinate closing/funding. They are the primary contact for participant banks and the borrower. The rest of the titles you list are, to varying degrees, mostly ceremonial and act as ways to put a bank's name on various league tables.
I haven't personally seen "Term Agent" or "Revolving Agent" before, but I assume this would arise if a company hired one agent bank for a revolving facility and another for a term loan. In practice, most borrowers hire the same agent for both and put both facilities into a single credit agreement.
A swingline lender is actually a practical title. It's typically the admin bank or a few banks with the largest commitments in the syndication. They make a separate sub-limit available for fast, short term borrowings, usually as a feature of the revolver.
The syndication agent title might actually confer responsibility: they would be responsible for working with each bank to determine how much each will commit to the facility, trying to make sure it ultimately all adds up to the total the borrower needs. In practice, the administrative agent is usually responsible for this.
Collateral agents are theoretically responsible for legal documentation related to collateral. In practice, this can be ceremonial. I believe documentation agent is also almost always ceremonial in practice.
Book runner and joint lead arranger titles are, to my knowledge, strictly ceremonial as a way to recognize banks who provided the largest commitments.
In this case, why does bank's "featured transactions" usually list themselves as joint lead arranger rather than administrative agent?
I assume because they can then take credit for a wider universe of deals? (Typically the lead bank is both the Administrative Agent and a Joint Lead Arranger).
Also, titles above (revolving x, term x, swingline lender) refer specifically to syndicated loans. But I think (someone chime in here) that JLA titles are also used for DCM/equity/M&A transactions, and they may mean something different in those worlds.
Thanks. For the purpose of resume, would you list that you have worked on deals where the bank was joint lead arranger or administrative agent? I have historically thought that it was the norm to list joint lead arranger deals. Now since administrative agent carries more weight, shouldn't I list those instead?
Unless you're the senior banker going out and winning the mandates, I don't think the title your bank earned matters nearly as much as the story you can tell about the role you played in the process.
Just my opinion and we're stretching my expertise here, so please take with a grain of salt.
In the leveraged space, MLAs, and then books / joint books, are usually the desired title across loans and bonds.
Doloribus veniam eos reiciendis cumque. Aut excepturi voluptatem eius autem optio consequatur aut. Ut corporis et iure similique asperiores.
Voluptatem provident occaecati molestiae dolorem. Omnis accusamus illo optio repellat ut molestiae. Harum fuga eligendi libero.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...