Participation/Sydication

With the introduction of Uniform Rules for Documentary Guarantee or URDG 758, the rules for Documentary Guarantee seem to be popular again. It can be imagined from the increasing number of questions that have popped up in recent days. Documentary Guarantee Forum is an effort to develop a platform to discuss these questions.
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jghn
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Joined: Sun Aug 28, 2011 11:14 pm
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Participation/Sydication

Post by jghn »

Hi,

Can someone give an idea about Participation/Syndication Guarantees?

Regards...
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picant
Posts: 1942
Joined: Wed Aug 20, 2008 1:49 pm

IMHO

Post by picant »

Hi Pal,

Syndication/participation mean IMHO, that a company has no full credit line with one bank/guarantor to afford a specific transaction so it asks some banks to partecipate to issue a guarantee for the credit line they normal grant to the company to a lead bank. So, a bank will issue 100% guarantee that will be counterguaranteed by other banks in percentage. May be the difference could stay in the fact that in syndication the issuing bank risks 100% covered by guarantee for ....% and in participation any bank will risk the granted percentage only:
Other comments appreciated
Ciao
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