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WHAT IS THE ROLE OF LOAN

SYNDICATION IN PROJECT FINANCING?

FRANCIS N. TWINAMATSIKO*

ABSTRACT: Loan syndication as a project financing mechanism has increased over the last decade

despite the diverging needs of the lenders. The incentive for lenders to join the syndicate is obscured, though

many international project deals are financed through loan syndication. The objective of the paper is to

investigate the role of loan syndication in project financing. The motivation for this research paper stems from

the importance of credit in the project financing structure and the growing importance of syndicated loans inproject financing. The paper critically analysed the literature on the subject to derive the conclusions. The

findings indicate that the role of syndication is diverse however, mobilisation of funds and risk diversification

prevail over others.

* The author completed an MSC in Energy Studies, with a Specialising in Energy Finance, at the Centre forEnergy, Petroleum and Mineral Law and Policy (CEMPLP) at the University of Dundee. He holds an MA inEconomic Policy and Planning and a BSC (Economics) from Makerere University, Kampala-Uganda, and aDiploma in Petroleum Policy and Resource Management from PETRAD, Norway. He has also attended variousshort courses in Taxation from different countries. He is Head of Research and Statistics Division, Tax PolicyDepartment, Ministry of Finance, Planning and Economic Development, Kampala-Uganda. Email:fntwine@yahoo.com.

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TABLE OF CONTENTS

Page

List of Figures.

List of Tables

ABBREVIATIONS

1.0 INTRODUCTION

2.0 BACKGROUND

2.1 Overview of Loan Syndication

2.2 FinancingStructures Selected Projects

3.0 THE PROCESS OF LOAN SYNDICATION

3.1 The Pre- Mandate Phase

3.2 Marketing of the Loan

3.3 Administration of the loan

4.1 Obligations of Lenders

4.2 Obligations of the Borrower (SPV)

4.3 Obligations of the Agent

5.0 THE ROLE FOR LOAN SYNDICATION.

5.1 Risk Diversification

5.2 Mobilisation of Funds

5.3 Risk Exposure

5.4 Information Sharing

5.5 Competitive Pricing

5.6 Reduction in Marketing Costs

6.0 MEASURES TO ENSURE SUCCESSFUL LOAN SYNDICATION.

6.1 Default and Remedy Clause

6.2 The Sharing Clause

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6.3 Loan Syndication Democracy

6.4 Negotiation

7.0 CONCLUSION

BIBLIOGRAPHY

List of Figures

Figure 1: Syndicated Loans Facilities 1992-2008

List of Tables

Table 1: Financing Structures of Selected Projects.

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ABBREVIATIONS

ADB - Asian Development Bank

BIS Bank for International Settlement

CA - Credit Agreement

CB - Catalyst Bank

COD - Commercial Completion Date

CRB - Credit Reference Bureau

EBRD - European Bank for Reconstruction and Development

EoD - Event of Default

FAC - Final Acceptance Certificate

IFC - International Finance Cooperation

MPS - Minimum Performance Standards

PAC - Provisional Acceptance Certificate

PB - Participating Bank

PC - Project Completion

SPV - Special Purpose Vehicle

WB - World Bank

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1.0 INTRODUCTION

Loan syndication is a funding mechanism where two or more banks come together contribute

a portion of the loan to finance the project. Loan syndication1is the most common form used

for funding project finance deals, especially when it involves large sums. This is especially

true for energy and infrastructure projects. The implementation of the planned project

depends on the availability of funds to finance it from start to completion. Equity2

contribution is usually limited and the project is usually financed by debt for a large

proportion of its finance structure, sponsors therefore must ensure that funds are available

before the project starts. The project finance is based on limited or non-recourse3to sponsors,

therefore repayment of the loan is based on the isolated and assignable cash flow from the

project4. Therefore banks need assurance to the effect that the project will be able to generate

revenue after its completion phase before committing funds to the project. This is done by

ensuring that the project has an off-taker5, commitment by sponsors through various

covenants and representations, input supply contract (fuel or gas in case of power projects),

engineering, procurement and construction contract and government support undertakings.

Loan syndication as a project financing mechanism has been increasing over the last decade

(see graph 1), despite the transactions costs involved in securing the loan agreement of all the

participating parties in the syndicate. Schure, et al (2006) show that banks extended

syndicated loans equivalent to US $2 trillion in 2003. The question is whether syndicated

loan have benefited all the counterparties. The main objective of this paper is to examine therole of loan syndication in project financing. The motivation for this research paper stems

from the importance of credit in the project finance structure and the growing importance of

syndicated loan structures in project financing. The paper has investigated the benefits

syndicated loans offer to both lenders and borrowers in order to maximise the returns on debt

and equity respectively. To achieve the objective, the paper analysed the literature on the role

of loan syndication to derive the conclusions.

1Loan syndication is one way of financing the project where many banks come together and contribute

portion of the loan requested by the borrower.2Equity ranges from 20% to 40% and debt makes 60% to 80% in most projects (Sein, 1996).

3In practice, most projects are financed based on limited recourse. Project Sponsors commit to providing

contingent financial support above the upfront equity to give lenders extra comfort (Sein, 1996).4Project financing is based on limited or non-recourse.

5Power purchase or gas sales agreement,

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2.0 BACKGROUND

2.1 Overview of Loan Syndication

Loan syndicated facilities for project financing has been increasing since 1992. In 1992, a

total of US $194.1 billion were signed as loan syndicate credit facilities, which have since

increased to $2,666.62 billion in 2007 (see Graph 1). In 2008, syndicated loan facilitiesreduced by 37% in 2008 due to the financial crisis which especially affected credit facilities

in the last quarter of 2008. In 2001 to 2003, syndicated loans reduced by 9%, 7% and 10%

due to the September 11, 2001 attack on the USA. However, it picked in 2004 with a growth

rate of 38% (see appendix one). It is evident from the syndicated loan data that international

developments affect credit facilities as they increase the risk of lending and reduce

international financial flows.

Figure 1: Syndicated Loans Facilities 1992-2008

Source: Bank for International Settlements (BIS). Quarterly Review March, 2009.

From Figure 1, a large proportion of syndicated loan finance projects are in developed

countries (on average 87%). Only 13% average (1992-2008) finance projects in developing

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countries. This may be due to the high risk and limited capacity to design international

project finance deals.

2.2 FinancingStructures Selected Projects

Table 1: Financing Structures of Selected Projects.

Project Name Equity6

($

Million)

Total

Debt

($

Million)

Syndicated

Loan ($M)

Total

Financing

($M)

Percent of

Syndicate

amount over

Total Debt.

The Hub PowerProject of Pakistan(1986)

372 1,460 695 1,832 48%

Power Transmissionand distribution ofThailand

112.5 262.5 155 375 59%

The Shajao PowerProject in China(1984)

56 484 131 540 27%

Star RefineryProject in Thailand(1992)

505 1,295 275 1,800 21%

Bridas Investmentsin Argentina

141 60 40 201 67%

Algeria-SpainPipeline Project(Morocco section)

146 829 222 975 27%

Nigeria LNG Project1995

3,240 360 260 3,600 72%

Source: Sein R. (1996) Financing Energy Projects in Emerging Economies, pp 181-207.

The data indicates the increasing importance of loan syndication in project financing. In the

19thcentury, banks started syndicating loans to share risks. In addition, most project finance

loans were huge and one bank could not manage financing the project without affecting other

portfolios. This paper explains why banks are interested in loan syndication by highlighting

the benefits available to both parties and the mitigation measures in case of default. The issue

that arises is that do banks arrange a syndicate? What is the role of each party to the

syndicate? How is the credit risk shared? What is the process of involving all the

participating banks? Who makes the decisions? What remedies are available in case of

6Includes Equity, Government contribution, and support from Multilateral Agencies.

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default? What is the process of a loan call-up? The paper would try to provide answers to

these concerns.

3.0 THE PROCESS OF LOAN SYNDICATION

3.1 The Pre- Mandate Phase

To achieve the objectives7, the loan syndication is designed to incorporate the concerns of all

the counterparties to the loan. It starts with a formal request by the prospective borrower

(SPV8) to the bank

9to advise and manage the process. The SPV mandates the bank to be a

lead manager. Alternatively the SPV can invite for competitive bidding10where a number of

banks with favourable terms of the loan are chosen to lead the syndicate and undertakes to

underwrite11

the loan. In this case, the banks appoint the lead manager.12

This results in the

award of the mandate to the lead bank, which identifies the interests of the SPV, designs an

appropriate loan structure, develops a convincing credit proposal and obtains internal

approval for marketing of the loan to prospective banks.

3.2 Marketing of the Loan

To address the concerns of the prospective participating banks, the lead bank, prepares an

information memorandum13

, term sheet, legal documentation and approaches selected banks

to invite for participation. The information memorandum includes an overview of the project,

its general background, the Project Company, its ownership, organisation and management,

financial and other information on sponsors and other major parties, experience in handling

7 Ensure coherence, participatory, effective monitoring, efficient design of the loan facility and competitive

negotiations of the term of the credit agreement8SPV and the borrower are used interchangeably.

9A bank that well knows the SPV and particularly has been dealing with the sponsors and by implication knows

their credit rating.10

In this case the underwriting banks select their lead manager.11Arranging means that sponsors are given an underwriting guarantee of the availability of funds, even if no

lenders are interested in supporting the project are found. In order to grant an underwriting guarantee, the

arranger bank must have significant financial strengths.12When the deal is not very large, the common practice is to grant the mandate to a sole arranger. However,

when the deal is sizeable and has an international scope it is more usual to create a team of arrangers, each of

which has a specific role (contacts with lawyers, handling tax matters, gathering and updating documentation)

(Stefano, 2008).The lead manager is responsible for analysis of the credit quality, negotiating covenants and

other pertinent issues related to the loan.13

The final information memorandum (FIM) used for syndication may be based on the preparatory information

memorandum (PIM) originally prepared by the sponsors or their financial advisors to present the project to

prospective lead managers (Yescombe, 2002). The PIM is the final outcome of the financial advisors work,

that is the document with which the advisor contacts potential lenders and begins to negotiate the credit

agreement and loan documentation with arrangers until the financial close is reached (Stefano, 2008).

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similar projects and their support for the current project. In addition, to ensure market risk is

mitigated the commercial basis for the project (market situation) covering supply and demand

particularly the off-taker of the output of the proposed project.

A full analysis of the project risks completion risk, market, political, technology, and force

majeure risks is done at this stage to ascertain whether the project is bankable. All contracts

pertaining to the sharing and allocation of the risk to parties competent to handle them are

cross checked by prospective banks advisors to ensure the project meets financing criteria.

At the request of the parties, project costs and financial plan, cash flow and the sensitivity

analysis, technical description of the construction and operation of the project are also

availed. In case there are issues for clarification, the borrower is called on to participate in

negotiations. When agreement is reached, each participating bank (PB) agrees to contribute a

proportion of the loan and signs the syndication agreement. This confirms that funds would

be available to the project based on the agreed financial plan.

3.3 Administration of the loan

After signing the syndicate agreement, banks select the agent to administer the loan, ensure

coordinated monitoring of the project performance. The agent acts as a conduit between the

SPV and all the participating banks (Yescombe, 2002). All issues that are related to project

implementation, administration, loan drawdown and repayments are communicated through

the agent to all counterparties. The agent receives drawdown from according to their quota

for onward transmission to the borrower. After the construction phase, the agent receives loan

repayments from the SPV and remits them to the respective banks.

14

4.1 Obligations of Lenders

The provisions of the credit agreement detail and cover the obligations of both the SPV and

the syndicate banks. This is obligatory if the deal is to be syndicated. Lenders agree to make

financial resources available up to a preset maximum amount and on request by the SPV. The

commitment of participating banks to a quota of the total amount of the loan precludes

responsibility for the obligation to make payments for any other bank (Graham, 1998).

Failure of one bank to fulfil its obligations to make advances to the SPV, the other banks are

14Obligations relate to implementation and monitoring after a syndicate is formed

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not held to make-up for the shortfall. Only the underwriting bank, takes this risk to find funds

to compensate for the shortfall.

It is the responsibility of the individual bank to ensure that their respective portion of the loan

is paid according to the financial plan. Banks have rights to get their portion of loan

repayment in accordance with the provisions of the agreement. In fact all the monies obtained

from the borrower (SPV), is shared equitably based on the proportions of their loan

contributions. They are also obligated to decide whether to continue lending during the

subsistence in the event of a default15

(EoD). However, this should not amount to stifling the

smooth implementation of the project, when it complies with its obligations.

4.2 Obligations of the Borrower (SPV)

The SPV is responsible for all project activities starting from construction phase in liaison

with the contractor and ensuring that the project is going on as planned. It receives draw

downs from the agent as provided for in the credit agreement. It is the responsibility of the

SPV to ensure that the project passes the completion test and performs as per the agreed

performance levels. In the operation phase, the SPV makes payments to the agent as

provided for under the repayment schedule. The SPV must ensure adherence to the cover

ratios, covenants, undertakings, representations and warranties. Failure to adhere would

constitute an event of default which leads to termination of the loan, acceleration or reducing

the tenure of the loan.

The SPV does not take any direct risk as to whether the syndication is successful or not. By

the time a syndicate loan agreement is signed, the loan agreement should have been signed

and thus underwritten by the lead managers. The onus is on the SPV to resist any delaying

tactics by the lead managers to avoid signing the loan agreement till the loan is syndicated to

eliminate their underwriting risk (Yescombe, 2002).

4.3 Obligations of the Agent

The loan is exclusively granted for a specific purpose specified in the credit agreement. It

cannot therefore be used for any other purpose without the approval of the syndicate banks. It

is the responsibility of the agent to enforce this. In case the agent detects that the loan has

15The event of default in a credit agreement includes non-payment, breach of representation, warranties and

covenants, bankruptcy and insolvency, and cross-default (Graham, 1998)

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been diverted, this amounts to a default. Therefore banks can terminate the loan or may force

the SPV to make early repayments16if there is evidence to the effect that the borrower will

not be able to repay the loan. It is the duty of the agent to monitor and inform the

participating banks the status of the performance of the loan. The agent however, has limited

discretion to take minor decisions as spelt out in the credit agreement. Major decisions are

taken with the approval of the syndicate. The agent is expected to act in the best interest of

the syndicate and performs his duties with skill, care and due diligence.

During construction, the agent organises site visits for the syndicate to keep breast of the

progress of the project and obtain formal presentations from the SPV and sponsors. Important

tests17 at each milestone of project completion (PC) are carried out in the presence in the

presence of all the parties. The agent ensures compliance with all the provisions of the credit

agreement (CA) for both the SPV and the syndicate banks. In case of detection of non-

compliance behaviour, organises impromptu meetings between the parties where strategies to

revert the project to normality are agree upon and implemented accordingly. Depending on

the gravity of the default, the parties may agree to terminate the loan or allow the SPV to

accelerate loan repayments. All payments from the project company are received by the

agent and remit them to the individual syndicate banks. In case of default, the agent with

agreement from syndicate banks takes enforcement action against the SPV.

5.0 THE ROLE FOR LOAN SYNDICATION.

5.1 Risk Diversification

According to Hurn, 1990 and Simons 1993, the standard theory of why banks join a syndicate

is risk diversification. Project finance deals are non-recourse and therefore depend on the

isolated and assigned cash flow from the project. With no recourse to project sponsors, in

case of default, the bank that spread the risk by joining many syndicates faces a lower risk

than one that finances projects individually. Winston, 1997 and Ongena, 2000 argue that

diversification is important to enhance shareholder value by reducing monitoring cost and

16Other remedies include acceleration of the loan declaring the loan immediately due and payable and

change of the loan into a demand loan (Graham, 1998).17

commercial completion date (COD) that checks whether the plant meets minimum performance standards

(MPS) and provided with provisional acceptance certificate (PAC), successive test are done till the syndicate is

satisfied that the plant complied with all requirements and is provided with a final acceptance certificate (FAC)

(Stefano, 2008).

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transactions costs. Bolton and Scharfstein 1996 raised the issue of how many banks should be

included in a syndicate. They developed a model of the optimal lenders and concluded that

the borrowers incentive to default is limited under multiple lending due to the uncoordinated

monitoring by participating banks. Their argument is based on the assumptions that all the

banks cannot renegotiate and internalise the agreement, and do effective monitoring

henceforth limits their ability to default for strategic reasons.

5.2 Mobilisation of Funds

Since mid 1980s, loan syndication has been at the centre stage of financing large projects. In

most cases, these projects require high credit facility18

that may not be mobilised by one bank

(Peter and Frank, 2000) (see Table 1). Financing of energy, infrastructural project bridges,

roads, tunnels, railways and public services like hospitals, prisons, and universities require

several billions of dollars which may not be available in one bank. In addition, banks have

lending exposure limits to specific sectors. When the exposure limits are high, the solution is

to join effort with other banks and contribute a portion of the loan as per the bank regulations.

This implies that in order to project finance deals with huge amounts, banks have to either

adjust their exposure limits or join a syndicate (Christophe, 2008). As long as the project is

bankable, banks with surplus funds are always happy to join the syndicate and enjoy its

benefits. To participate in debt financing, banks employ advisors to ensure that all risks are

allocated and the SPV has experience to implement the project in accordance with the

provisions of the credit agreement. The main aspect of project finance is that lenders do not

have recourse to the sponsor for loan repayment, but to the SPVs assets and cash flow,

therefore have to ensure that the project will generate revenue to repay the loan.

5.3 Risk Exposure

Risk sharing and exposure. Although the risks19in project finance structure are transferred to

parties competent to bear them, there is uncertainty that the project may not perform

according to the financing plans and the credit agreement (Hurn 1990 and Simons 1993). The

residual risk is also borne by all the participating banks. With many banks involved in the

syndicate, the risks are shared according the proportions of their contributions to the loan. In

18Loan Syndication is more suitable for the debt financing of energy projects which require large sums of

capital. Project sponsors can easily mobilise large sums using syndication mechanism (Sein, 1996, pp 97).19

Commercial banks that participate are usually experienced and can easily analyse complex project credit

risks that may be present in financing the project (Peter and Frank , 2000, 106).

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case of default, each bank bears a proportion of the risk, which is offset by returns from

successful projects. Banks are therefore cautious about the future performance of the loan

portfolios.

5.4 Information Sharing

Information sharing between many participating banks reduces risk exposure. Banks are

exposed to diverse information on borrowers, different sectors and different countries. They

are best suited to handle risks related to those particular sectors and countries. A syndicate

therefore acts as a reference credit bureau (RCB) on the borrowers and other sectors. This

further reduces their risk exposure and enhances investment in projects with the highest

returns on their equity (Peter and Frank, 2000). Information exchange is paramount for the

success of a loan syndicate. However, information gaps between the members of the

syndicate, can lead to agency problems (Christophe, 2008). To the SPV, a harmonised

channel of communication reduces costs and time that would otherwise been spent

communicating to individual participating banks.

5.5 Competitive Pricing20

Competitive pricing and more flexible funding structure benefits borrowers and the final

consumers of the output or service produced by the project. In cases where the process of

loan syndication is through competitive bidding, banks that offer the best terms of the loan

are awarded the tender (Christophe, 2008). This eases the repayment schedule of the

borrower in terms of reduction of interest rates, reduces cover ratios, and lessens loan tenure.

As a consequence, it increases the returns to equity and subordinated loans and leads to

smooth implementation of the project. Although Stefano (2008) argues that competition in

the sector has been stiff and differences in prices are minimal, it is important to note that

stiffer competition results in normal prices and maximises consumer welfare. In case of

power projects where the tariff is a function of debt service among others, any reduction in

interest rate benefits the power consumer.

20In structuring the loan, there is a trade off. Many participating banks generate competition and results in

better implementation (Benjamin, 2004).

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5.6 Reduction in Marketing Costs

To the participating banks, syndication provides them with lending opportunities that have

low marketing costs and chances to participate in future group financing. In developing

countries, commercial banks may not be exposed and experienced to loan syndication, they

are normally assisted by catalyst banks (CB) or multilateral agencies21

to access thesyndicated loan market (Sein, 1996). Many energy and infrastructure projects which require

high capital have been supported through the assistance of International Finance

Cooperation22 (IFC) as a lead arranger. This provides comfort and additional security to

commercial banks to participate in debt financing.

Despite its roles, the transactions cost involved make loan syndication costly. Its success

depends on a well designed credit agreement that provides for diverging interests of parties to

the syndicate.

6.0 MEASURES TO ENSURE SUCCESSFUL LOAN SYNDICATION.

6.1 Default and Remedy Clause

The credit agreement clearly specifies the remedies in case of default. Default arises from

non-payment of the loan, downslide in financial ratios, bankruptcy or Insolvency, non-

compliance with covenants, warranties and non-payment by the sponsor of any other loan

when due. However, all events of default must pass the materiality test in order to be

considered as EoD. The remedies include loan cancellation, right to accelerate the loan,

limitation of distributions to sponsors and step-in-rights23(Stefano, 2008). All participating

banks have the same rights to enforce these provisions, however some credit agreements

provide right of enforcement to some banks.

21

The World Bank (WB), European Bank for Reconstruction and Development (EBRD), Asian DevelopmentBank (ADB), and Inter-American Development Bank (IADB) provides partial risk guarantees to commercialbanks for lending to energy projects in developing countries (Sein, 1996, pp 96)22

The IFC handles all the technical and legal matters including risk mitigation measures and ensures that risks

are allocated to counterparties properly. Because the default on the repayment of any of the participating banks

is viewed as a default of the entire syndicated loan, thereby a default on repayment of the IFC loan. It is also

responsible for the administration of the syndicated loan and all matters related to disbursement and repayment

of the loan (Sein, 1996, pp 96).23

By means of the legal instruments provided in the finance documents, lenders are entitled to take control of

the project in order to remedy or make arrangements to remedy the causes of default situation as far as possible

(Stefano, 2008, pg. 274).

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6.2 The Sharing Clause

A sharing clause is intended to balance the interests of participating banks. It is designed to

share any proceeds from the SPV as a repayment of the loan or any other payment that results

from default and all costs related to the syndicate in accordance with their proportional loan

contributions. The clause is aimed at protecting the minority banks from the majorityparticipating ones. This ensures fair distribution of benefits to all participating banks and

leads to successful syndication.

6.3 Loan Syndication Democracy

The credit agreement contains provisions for decision making by the participating banks. In

this regard, the voting clauses are included to ensure that the syndicate obtains majority

consensus before making a decision. Voting is according to bank participation and a majority

vote would usually be obtained through a 50% simple majority or a 66% absolute majority

rule, and whichever the case, this must be expressly provided in the syndication agreement.

This power to exercise the syndicate voting rights must be exercised in the interest of the

syndicate, but not to the detriment of the voter. If adequately addressed in the credit

agreement, the syndicate democracy clause should be very instrumental in balancing the

decision making interests of the parties to the credit agreement. In case of major decisions

like calling up a loan, step-in-right enforcement; syndicate democracy prevails if the events

of default pass the materiality test.

6.4 Negotiation

This should normally be at the centre stage if loan syndication is to succeed in performing its

role. All provisions of the credit agreement and other financing documents are subject to a

comprehensive negotiation. In this regard, participating banks appoint advisors from different

disciplines to negotiate and ensure that the terms of the agreements are favourable. If the

bank feels that the terms are not in its favour, it has the liberty to leave the syndicate.

Appending the signature on the loan syndication agreement implies that all participating

banks agree to the terms of the agreement and will comply accordingly.

7.0 CONCLUSION

Loan syndication plays a significant role in financing projects. Most projects that require

large sums of funds are easily financed through syndication mechanism, otherwise it would

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BIBLIOGRAPHY

BOOKS

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Graham, D. V., Project Finance (2nd

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Paul, S., et al, A Theory of Loan Syndication (Victoria, Canada, University of Victoria,2004).

Peter, K., N. and Frank J. F., Project Financing, (7thed.) (London, UK, Euromoney Books,2000).

Philip, R., W., Project Finance, Subordinated Debt and State Loans (London, UK, Sweet andMaxwell Limited, 1995).

Rhodes, T., (ed.), Syndicated Lending: Practice and Documentation (London, UK,Euromoney Publications PLC, 1996).

Sein, R., Financing Energy Projects in Emerging Economies (Tulsa, Oklahoma, USA,Pennwell Publishing 1996).

Stefano, G., Project Finance in Theory and Practice: Designing, Structuring, and Financing

Private and Public Projects (London, UK, Academic Press, 2008).

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ARTICLES

Bolton, P., Scharfstein, D.S., Optimal Debt Structure and the Number of Creditors, Journalof Political Economy 104, 125, (1996).

Massino, N.,Legal Aspects of Project Finance, in Project Finance in Theory and Practice:

Designing, Structuring, and Financing Private and Public Projects, 223-287 (Stefano, G.,London, UK, Academic Press, 2008).

Ongena, S., Smith, D.C., (2000) What Determines the Number of Bank Relationships? Cross-Country Evidence, Journal of Financial Intermediation9, 2656, (2000).

Simons, K., Why do Banks Syndicate Loans? New England Economic Review Jan/Feb issue,4552, (1993).

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Winton, A., Competition among Financial Intermediaries when Diversification Matters,Journal of Financial Intermediation 6, 307346, (1997).

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