How to use the syndicated loan market to improve access to liquidity

What are lenders looking for?

Lenders continue to focus on relationship, return and the quality of the underlying assets. However, today they are even more focused on rebuilding their loan portfolios, particularly with quality funded loans.

As a result, recent syndicated activity shows overall improvement in both pricing and structural flexibility. This represents a significant shift back to the benefit of the borrower.

What should companies expect to gain from a syndication?

As syndicated loan activity picks up and pricing and structure become more competitive, access to debt capital markets can provide a fast, flexible way for companies to solidify their capital base and fuel growth.

Syndicated debt offers a variety of benefits when compared to other alternatives. Competitive cost of capital, flexible terms and broader diversification of capital providers are among them.

In most instances, a syndication can offer competitive costs, preserve liquidity and deliver in a timely manner.

How are syndicated loans structured?

Each syndicated loan is unique to the borrower’s situation, and there are dozens of ways to structure a syndicated transaction, including revolving and term credit facilities, both secured and unsecured, and term loans.

This article was prepared for general informational purposes only and does not purport to be comprehensive. The information and views in this article do not constitute legal, tax, financial or accounting advice or recommendations to engage in any transaction. The views expressed in this update are subject to change due to market conditions and other factors.

Cathleen Walker is managing director in PNC’s Debt Capital Markets. Reach her at [email protected] or (412) 762-1015.