DOCUMENTATION FOR A SYNDICATED LOAN

4.1  Mandate Letter: The borrower appoints the Arranger via a Mandate Letter (sometimes also called a Commitment Letter).  The content of the Mandate Letter varies according to whether the Arranger is mandated to use its "best efforts" to arrange the required facility or if the Arranger is agreeing to "underwrite" the required facility.  The provisions commonly covered in a Mandate Letter include: (i)  an agreement to "underwrite" or use "best efforts to arrange"; (ii)  titles of the arrangers, commitment amounts, exclusivity provisions; (iii)  conditions to lenders' obligations; (iv)  syndication issues (including preparation of an information memorandum, presentations to potential lenders, clear market provisions, market flex provisions and syndication strategy); and 

(v)  costs cover and indemnity clauses. 

4.2  Term Sheet: The Mandate Letter will usually be signed with a Term Sheet attached to it.  The Term Sheet is used to set out the terms of the proposed financing prior to full documentation.  It sets out the parties involved, their expected roles and many key commercial terms (for example, the type of facilities, the facility amounts, the pricing, the term of the loan and the covenant package that will be put in place). 

4.3  Information Memorandum: Typically prepared by both the Arranger and the borrower and sent out by the Arranger to potential syndicate members.  The Arranger assists the borrower in writing the information memorandum on the basis of information provided by the borrower during the due diligence process.  It contains a commercial description of the borrower's business, management and accounts, as well as the details of the proposed loan facilities being given. It is not a public document and  all potential lenders that wish to see it usually sign a confidentiality undertaking. Syndicated Loan Agreement: The Loan Agreement sets out the detailed terms and 

conditions on which the Facility is made available to the borrower.

4.4  Fee Letters: In addition to paying interest on the Loan and any related bank expenses, the borrower must pay fees to those banks in the syndicate who have performed additional work or taken on greater responsibility in the loan process, primarily the Arranger, the Agent and the Security Trustee.  Details of these fees are usually put in separate side letters to ensure confidentiality.  The Loan Agreement should refer to the Fee Letters and when such fees are payable to ensure that any non-payment by the borrower carries the remedies of default set out in the Loan Agreement.