Syndication and Securitisation
In consultation with the Borrower, CFSC will assemble a group of lenders to form a syndicate, with each lender providing portions of the required amount. The loan normally is signed six to eight weeks after the mandate has been awarded and after execution, the borrower can draw down funds.
CFSC will assume the responsibility of administering the syndicated facility itself, as well as all borrowings, repayments, interest settlements and fee payments. A major component of the administration function is to ensure that communication between the lending institutions and the borrower remain open so that all sides remain informed about changing business and market realities. In return for providing these services, CFSC is compensated with an annual fee.
The advantage of syndicated loans is that this vehicle allows the borrower to access a greater amount of funding which may not normally be available from only one source.
Securitisation is the creation of asset backed securities. These debt securities are supported by a stream of cash flows. Securitisation is a method of selling off a stream of cash flows. CFSC will orchestrate the securitisation process including the preparation of all required legal documents and usually assumes the role of Trustee.