A Study On Legal-issues Of The Domestic Syndicated Loan

The syndicated loan is currently an important financing method.In foreign countries,international syndicated loan has achieved great advances in the international capital market;domestically,the start of syndicated loan is fairly late and the advance of it is fairly slow.In recent years,benefiting from the national policies to enhance the investments in infrastructure facilities,syndicated loan has received strong support from the government supervisory department.Commercial banks have actively started business in syndicated loan,and the development of domestic syndicated loan has been accelerated.At the same time,there are many subjects of law involved in the syndicated loan,and the legal relations are therefore more complicated.Parties may be exposed to high litigation risk, if they are unfamiliar with the laws and regulations of syndicated loan.In order to facilitate the healthy development of the domestic syndicated loan,it is a top priority to find out the major legal issues existing in the syndicated loan business,and conduct investigations on them and provide solutions to them.Syndicated loan is a large loan in which a group of banks and non-bank financial institutions,leading by one bank or several banks, provide domestic and foreign currency loans or credits for a borrower through an agent bank.The banks involved are under the same loan agreement and follow the agreed loan period and ratio.The parties concerned in the syndicated loan include borrower,leading bank, co-leading bank,participant bank,agent bank and guarantor.According to the organization of the syndicate and difference of the interests and responsibilities among the members in the syndicate,Syndicated loan can be classified into direct syndicated loan and indirect syndicated loan.By investigating the fundamental principles and legal relationships of the domestic syndicated loan,this paper,from the aspect of precaution, conducted analysis and summarization of the legal risks of the domestic commercial banks when doing the syndicated loan business,and presented some advice on legal risk prevention.On the other hand,from the aspect of post-settlement,this paper investigated the default events and the default relief measures of the syndicated loan to facilitate further development of domestic syndicated loan.