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John Moffat.
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Jiya024
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“Syndicated loan – for large amounts of debt finance, where one bank is not prepared to take the risk of lending such a large amount, a loan may be raised from a syndicate of banks. Rates of interest tend to be slightly higher than those in the bond market, but transaction costs are low and loans can be arranged much quicker than a bond issue.”
sir i have 2 doubts related to this, one: how can transactions costs be low? two, how can loans which involve somany parties be arranged quickly?
John Moffat
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Issuing new bonds takes time and is an expensive process.
Taking a loan from a bank (or several banks) has few, if any, transaction costs and arranging a loan is going to be much quicker than the process of issuing new bonds.
Jiya024
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