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A syndicated loan, also known as a syndicated bank facility, is a loan offered by a group of lenders. This group of lenders is referred to as a syndicate or consortium and each lender often referred to as a member. Members work together to provide funds for a single borrower. The borrower could be a corporation, a large project or a sovereign entity, such as a Government. Syndication is used when a borrower requires an amount of loan that is too large a loan for a single lender. Other instances when this route is used could be when a project needs a specialised lender with expertise in a specific asset class or when lenders want to diversify their risk on a single borrower. In commercial terms, the syndication is a single loan transaction. The liabilities of the lenders are however independent of each other in legal terms. A single lender in syndication transactions cannot take enforcement action without majority votes of the lenders in favour of such enforcement action. The security is also shared on a pari-passu basis where each lender ranks as per their contribution and is paid pro-rata of all payments or recovery.

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