How Syndication Works
The Polinvest Syndication Model
Lead Arranger Role
Polinvest acts as lead arranger and syndication agent for each facility. In this role, we assume responsibility for structuring the facility, preparing the information memorandum, sourcing and managing lender relationships, and coordinating the legal documentation process through to financial close.
Lender Network
Our syndication network includes commercial banks, development finance institutions, bilateral lenders, trade finance houses, and specialist credit funds. We maintain pre-approved lender relationships across more than 20 institutions, enabling us to assemble a lending syndicate efficiently and competitively.
Borrower Benefits
For borrowers, a syndicated facility offers access to a volume of capital that typically exceeds any single lender's individual limit, while preserving a single relationship, with Polinvest as arranger, rather than managing multiple bilateral lenders. Pricing is often more competitive than comparable bilateral facilities due to the diversification of risk across the syndicate.
Mandate Acceptance
We begin by accepting a mandate from the borrower and conducting a preliminary credit review. This allows us to assess the viability of the syndication, identify the most appropriate lender profile for the transaction, and agree the key commercial terms, including facility amount, pricing range, tenor, and security package, before committing to a full syndication process.
Information Memorandum and Lender Approach
Our team prepares a comprehensive information memorandum covering the borrower's business, financial performance, the use of proceeds, and the proposed facility structure. We then approach a targeted list of lenders from our syndication network, managing the distribution of materials, due diligence queries, and credit approval timelines.
Term Sheet Negotiation
Once sufficient lender interest is secured, we coordinate the negotiation of the facility term sheet, representing the interests of the borrower in achieving acceptable pricing, covenants, and reporting obligations while ensuring the lender group is satisfied with their risk allocation. We use our knowledge of market precedent to keep negotiations focused and efficient.
Documentation and Close
Following term sheet execution, we coordinate the facility agreement drafting process with the borrower's and lenders' legal counsel. We manage the condition precedent checklist, ensure all security documents are executed, and oversee the drawdown process to achieve financial close on time and within budget.
Facility Types
What We Syndicate
Term Loans
Amortising and bullet term loans for capital expenditure, business acquisition, and project funding. Tenors typically range from 12 months for short-term facilities up to 10 years for long-term corporate or project finance transactions.
Revolving Credit Facilities
Committed revolving facilities for working capital, trade finance, and general corporate purposes. These facilities provide borrowers with flexible access to a pre-agreed quantum of capital, drawn and repaid on a revolving basis within the facility term.
Project Finance Facilities
Non-recourse or limited-recourse project finance facilities for infrastructure, energy, mining, and industrial projects. These facilities are structured against the cash flows of the project itself rather than the balance sheet of the sponsor, enabling larger facilities with longer tenors than conventional corporate lending.
FAQ
Common Questions
What security does Polinvest require for a syndicated facility?
Security requirements vary by transaction type and borrower profile. Most syndicated facilities are supported by a combination of fixed and floating charges over company assets, assignment of key contracts, share pledges, and in some cases personal or corporate guarantees. Our structuring team will advise on the most appropriate security package for each transaction.
Can a borrower be an individual or must they be a company?
Our syndicated facilities are open to individuals, companies, partnerships, and any other eligible entity, anyone who meets the criteria for the relevant facility. Each facility has a minimum and maximum loan threshold. All borrowers go through the same KYC, due diligence, and credit assessment process regardless of entity type. Individual borrowers may be asked to provide supporting documentation appropriate to their circumstances.
What is the typical all-in cost of a syndicated facility?
The all-in cost depends on the borrower's credit profile, the facility structure, tenor, and prevailing market conditions. Our arrangement fees typically range from 1% to 2.5% of the facility amount, with interest margins varying according to credit risk and market benchmarks. We provide indicative pricing as part of our initial mandate acceptance process.
How many lenders are typically in a syndicate?
The size of the syndicate depends on the facility amount and the appetite of individual lenders. Smaller facilities of USD 5 million to USD 20 million may involve two to four lenders, while larger transactions of USD 50 million and above typically attract five to ten or more lenders. We aim to maintain a manageable syndicate size to keep decision-making efficient.
Syndication in Practice
Building the Right Lending Syndicate
Assembling a lending syndicate is both an art and a science. The science lies in matching the credit profile of the borrower and the structure of the facility to the risk appetite and ticket size of available lenders. The art lies in managing the relationships, timing, and dynamics of a group of institutional lenders who each have their own credit approval processes, reporting requirements, and risk preferences. At Polinvest, we bring both, supported by more than a decade of institutional relationships built transaction by transaction.
One of the most common mistakes in syndicated lending is approaching too many lenders simultaneously, creating a market for the transaction before the structure is fully optimised. We take a targeted approach: we identify two or three anchor lenders whose participation will provide critical mass, structure the facility around their requirements, and then open the syndicate to additional participants once the anchor positions are committed. This approach is more efficient, reduces the risk of deal fatigue, and typically produces better pricing for the borrower because the process is cleaner and faster.
Post-close management is an area that many borrowers underestimate when they choose their arranger. A syndicated facility does not end at drawdown, it continues for the full tenor, with ongoing covenant monitoring, lender reporting, amendment processes, and in some cases restructuring requirements. Polinvest remains the facility agent for the life of every facility we arrange. Our team handles all post-close administration, maintains the relationship with the lending syndicate, and represents the borrower's interests in any lender discussions, including those that arise in more challenging circumstances.
Polinvest Capital
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