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Business Banking

Syndication

In line with customer business growth, more than one Sharia bank and/or financial institutions are often needed to jointly serve the customer’s big financial needs. BSM professional services in Sharia syndication are available to enhance Customer feasibility in applying for big size Sharia financing facility and getting competitive margin/profit sharing without having to deal many other Sharia banks and/or financial institutions. Bank Syariah Mandiri can prepare the arrangement as well as assist the Customer to optimize the financing in need.

Arranger
Bank Syariah Mandiri as Lead Arranger can arrange the organizing of syndicated facility of several Sharia banks/financial institutions for co-financing customer’s business or project.

Two types of Syndication

  1. True Syndication

Syndicated financing by two or more banks based on the same terms and conditions for all Facility Providers/Banks. The Financing Agreement Documents are administered by an Agency.

Objectives:
Organizing a syndicated financing facility between two or more banks and/or financial institutions for financing a big-scale project that cannot be financed by one bank.

Benefits:

    • Opportunity for getting bigger financing.
    • Simple administration procedure.
    • Track record improvement.
    • Increased Credibility
  1. Club Deal

Multilateral financing facility of a specific project based on a bilateral financing agreement between the Customer and each of the Facility Providers/Banks.

Objectives and Benefits:

  • Alternative financing for the customer in case one of the banks has limited capacity in financing due to the existing scale of financing, Legal Lending Limit (BMPK) or risk consideration.
  • Customer has an opportunity for getting financing for the project.
  • Intensive negotiation between the Debtor and each of the Creditors.
  • Maintaining business relations.
  • Solution to BMPK problem without losing Customers.
  • Each Creditor has the authority to make decision pursuant to the bilateral agreement with the Debtor.
  • Risk sharing.

Agencies

Bank Syariah Mandiri can act as an Agent between the Customer and Facility Providers/Banks as well as the syndication facility administrator during the tenor. After the signing of the Syndicated Financing Agreement, the Agent starts working until the full repayment of the Syndicated Financing. In sum, the Agent assists all parties involved in the syndicated financing to accomplish their rights and obligations.

  1. Facility Agent

Bank Syariah Mandiri assists the Customer and syndication participants in accomplishing the condition precedents and other covenants, disbursement of syndicated financing and its payback, calculation of margin/profit sharing of the syndicated financing facility, monitoring and distributing reports in need.

Objectives & Benefits to the Customer

    • More efficient, because the Customer deals only with the Facility Agent.
    • Ease of margin/profit sharing calculation by Facility Agent
    • Faster to find a solution in case of a problem.

Objectives & Benefits to the Facility Provider/Bank:

    • Assisting the Facility Providers/Banks  in monitoring the accomplishment of condition precedents and other covenants by the Customer.
    • Calculation of margin/profit sharing by the Facility Agent
    • Faster to find a solution in case of a problem.
  1. Security Agent

Bank Syariah Mandiri assists the Customer in keeping, managing and updating all security documents to the syndicated financing, monitoring the Security Coverage Ratio, collateral insurance, inspection on the collateral and monitoring of the Appraisal Report.

Objectives & Benefits to the Customer:

    • More simple and efficient
    • Easier to monitor the validity of collateral documents and insurance due to single administration by the Security Agent

Objectives & Benefits to the Facility Provider/Bank:

    • Assisting the Facility Providers/Banks in the settlement of problems related to the legally bound collateral.
    • Takeover of the collateral upon approval from the Facility Providers
    • Assisting the administration document monitoring  related to the financing collateral.
  1. Escrow Agent

Bank Syariah Mandiri assists the Customer in monitoring and managing the account, especially in project financing. Included in the Escrow Agent responsibilities are the monitoring of outstanding balance and cash flow from and to the Escrow Accounts, realization of payment obligations (fee, margin/profit sharing, installments etc), distribution of reports (account etc.) to the related parties, providing advice to on the account structure and providing of control mechanism on the use of fund.

 Objectives & Benefits:

    • Ensuring that the escrow account fund is allotted in accordance with the agreement on account management
    • Efficiency for Facility Providers/Banks in monitoring the use of fund by the Customer.
    • Account Activity Reports on the Escrow Agent can be used as Early Warning Tools to detect Customer’s cash flow problem.
    • facilitating the Customer in the calculation and use of fund (cash management).


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