Under these new guidelines, I have found a few lead banks that are willing and able to undertake these transactions and team up with other similar lenders. It is certainly not the same game it was last year and changes are continuing. Market flex language in a commitment gives the lender the right to vary the underlying loan terms in order to complete the syndication.
Where in the past, one lender committed to the loan and then, at its risk, syndicated the loan, the risk of a lender successfully completing a syndication of a loan has shifted to the loan and then, at its risk, syndicated the loan, the risk of a loan has shifted to the buyer. Syndicated loans show similar changes. Lenders are now joining together to co-lead loans and then are bringing in additional participants prior to loan closing. Where in the past, one lender committed to holding a substantial portion of the loan. Syndicated loans show similar changes.
Lenders are now joining together to co-lead loans and then are bringing in additional participants prior to loan closing. Developers seeking construction loans are finding that banks are generally no longer willing to firmly commit to loans of $250 million or more without participants committed to holding a substantial portion of the loan. Lending institutions are taking a new approach to large-scale loans.
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