Agent Bank

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1. Bank named by members of a multibank lending syndicate to protect the interests of the participating banks in administering a loan to a foreign or domestic borrower. Its role is similar to a bond trustee. The agent bank is responsible for notifying other banks of advances or drawdowns by the borrower and changes in interest rate. Often synonymous with Lead Bank or lead manager.

2. Bank that participates in the credit card program of another bank, by issuing credit cards and acting as a merchant depository, but does not finance the card receivables. Most financial institutions participating in bank card programs are agents rather than principal issuers.

3. Foreign bank doing business in the United States on behalf of its parent. Such banks negotiate terms for international letters of credit and act as collection agents for the parent bank, but do not accept deposits or make loans in their own name. Also called agency bank.

Agent Bank

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Home > Library > Business & Finance > Investment Dictionary

A bank that acts in some capacity on behalf of another bank. It can mean any of three types of bank:
(1) The bank in a loan syndicate that advises other participating banks of advances taken and changes in interest rates for a foreign or domestic borrower
(2) A bank that participates in the credit card program of another bank by issuing credit cards and performing other duties (excluding financing card receivables)
(3) A foreign bank doing business in the U.S. on behalf of its parent bank, performing such tasks as issuing international letters of credit, but not accepting deposits

Also known as an "agency bank."

Investopedia Says:
A syndicate manager will receive a mandate from a borrower to arrange a syndicated loan. After the agreement closes, the duties of the syndicate manager end. At that point, the syndicate manager is usually appointed the agent bank, which coordinates the loan between the borrower and participating banks.

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