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syndication:- it is a process in which one bank which is acting as a lead bank takes the responsibility of arranging the whole amount of loan (which might be huge) for a corporate. since it can not be afforded single handedly, it then calls other banks for participation. the tranches are made and alloted to the banks on pro rata basis of their quotes. the lead bank may also act as an underwriter. it charges a fee accordingly for the range of services it is providing. the borrower's contract is with single bank i.e. the lead bank.
in consortium a large no. of banks the come together to lend a borrower. here also there might be a lead bank and sharing of credit on pro rata basis of quotes but the contract is separate with different banks. there might not be an underwriter present.
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What is the difference between loan syndication and consortium finance?
The main difference between loan syndication and consortium finance is that syndication is done based on common terms between the lender and borrower. Consortium finance has to be arranged by the borrower, such as when one bank cannot accommodate the entire loan amount.
What is the difference between syndication of loan and consortium finance?
syndication of loan is arranged by a lead arrangers and it is on common terms which is finalised between borrower and arranger where as in consortium loan borrower has to arrange the finance himself from different bank this finance on different term and at different pricing Loan Syndication and Consortium finance is resorted to when a client needs a huge loan which a single Bank either cannot provide or cannot take risk to provide. In Loan Syndication, a large bank approaches the client, fixes up the terms and conditions, interest rates etc. Thereafter, he approaches other Banks for "selling" of this loan. The other banks ,if agree, "purchase" a part of the loan on the same or different terms and conditions. In Loan Syndication, the client deals with one Bank only. In Consortium Finance, a Large Bank approaches the client, collects the information about amount of loan, terms and conditions and then calls a meeting of other Banks. Those who agree to lend the money approach the client and the client fixes up the loan with each of them separately. The follow-up and other jobs is done by the Leading Bank of the consortium which is mutually decided by the participating Banks.(Need not be the highest lender).
What is consortium financing?
Under consortium financing, several banks (or financial institutions) finance a single borrower with common appraisal, common documentation, joint supervision and follow-up exercises, these banks have a common agreement between them, the process is somewhat similar to loan syndication.
What is the difference between a consortium and syndicate?
Both terms are interchangeable. Generally, a consortium is formed for the first to transact some business such as consortium of underwriters A syndicate on the other hand is for repeated business. Two or three banks may join hand and provided syndicated loans to the industry.
What is the motto of International Color Consortium?
International Color Consortium's motto is 'Making color seamless between devices and documents'.
Difference in loan syndication and multiple banking?
multiple banking is use of more than one bank while loan syndication is where several banks lend the money for one loan.
What are the benefits of syndication?
what are the benefits of loan syndication
What is full form of rss?
simple RSS stands for "really simple syndication" syndication here refers to syndication of web content
What are the characteristics of consortium?
The word "consortium" refers to a collaboration between two or more groups or individuals in order to achieve a shared goal. The word comes from the Latin for "partnership".
What is rss full form?
simple RSS stands for "really simple syndication" syndication here refers to syndication of web content
What is RSS 2.0?
RSS is a Web content syndication format.Its name is an acronym for Really Simple Syndication.RSS is a dialect of XML. All RSS files must conform to the XML 1.0 specification as published on the World Wide Web Consortium (W3C) website
Is a syndication like a developer?
The function of syndication commonly overlaps with the role of the developer
