Hi,
Can someone give an idea about Participation/Syndication Guarantees?
Regards...
Participation/Sydication
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jghn
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picant
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IMHO
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
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