Question

Do you know any multinational firm that takes a syndicated loan? Which banks underwrite the loan? Which bank is the lead bank? What are the loan terms? Which currency is used to dominate the loan?

Answer 1

Example of a Syndicated Loan

Syndicated loans are usually too large for a single lender to handle. For example, the Chinese corporation Tencent Holdings Ltd., the biggest internet company in Asia and owner of popular messaging services WeChat and QQ, signed a syndicated loan deal on March 24, 2017, to raise $4.65 billion. The loan deal included commitments from a dozen banks with Citigroup Inc. acting as the coordinator, mandated lead arranger, and book runner, which is the lead underwriter in a new debt offering that handles the "books."

Previously, Tencent had increased the size of another syndicated loan to $4.4 billion on June 6, 2016. That loan, used to fund company acquisitions, was underwritten by five large institutions: Citigroup Inc., Australia and New Zealand Banking Group, Bank of China, HSBC Holdings PLC, and Mizuho Financial Group Inc. The five organizations together created a syndicated loan that encompassed a five-year facility split between a term loan and a revolver. A revolver is a revolving credit line, meaning the borrower can pay down the balance and borrow again.