Lawyers’ role crucial in preparing syndicated loans for big projects

By Li Yunhai and Tian Lei, Zhonglun W&D Law Firm

According to the size of financing for a large-scale project as well as the progress and schedule for the use of funds, financing will sometimes be done by various methods such as a renminbi syndicated loan, foreign currency syndicated loan and renminbi revolving credit line syndicated loan.

The principal parties to a syndicated loan comprise a lead bank, a co-lead bank, a guarantee correspondent bank, a clearing correspondent bank and various other participants. Since they need to balance their respective interests with due regard to their respective business models, the syndicated loan becomes relatively complex in terms of the design of a legal framework or a credit structure, or other aspects.

To secure the loan facility successfully requires analysing the business features of the participants and designing a credit structure acceptable to the borrower, together with concisely designed and practical legal terms for the lending policies of participants, and setting reasonable conditions precedent for the syndicated loan. Professional legal services are essential.

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Li Yunhai is head of the finance practice at Zhonglun W&D Law Firm, and Tian Lei is deputy head of the firm’s real estate and construction practice

Zhonglun W&D




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