Syndication

In keeping with the development of the Customers’ business, more than one bank and/or sharia financial institution may often be needed to jointly address the customer's big financial needs. With our professionals in the field of Sharia Syndications, the Customers are trusted with receiving a large number of Sharia financing facilities with competitive margins/leases/profit sharing without having to deal with multiple banks and/or other sharia financial institutions, but simply with Bank Syariah Mandiri that will help the Customers in optimizing the financing they receive.

Arranger

Bank Syariah Mandiri as a Lead Arranger may help organize the process of establishment of syndication facilities with several banks and/or sharia financial institutions to finance the Customers’ business or projects.

There are Two Types of Syndicated Loans, i.e.:

  1. 1. Underwritten Deal

Financing that is syndicated by two banks or more under a Financing Contract whose terms and conditions apply equally to all the Facility Providers/Banks. These Financing Contract Documents are administered by the Agent.

Purposes:
To organize the process of establishment of syndicated financing facilities between banks and/or sharia financial institutions to finance a large-scale project a bank cannot afford the financing on its own.

Benefits:

  • An opportunity to obtain more financing
  • Easy and simple administration procedures.
  • Improve the track record
  • Enhance credibility.

2. Club Deal

A multilateral financing facilities for a specific project under a bilateral financing agreement between the Customer and each Facility Provider/Bank.

Purposes and benefits:

  • As an alternative for the Customer in case one of the Banks has limitations in providing or increasing financing facilities in terms of financing scale, a Legal Lending Limit (BMPK), or risk considerations.
    • Customers have accessibility to receive financing for their projects.
    • Intensive negotiations between the Debtor and each Creditor.
    • To foster business relationship.
    • To address any BMPK problems without losing customers.
    • Each Creditor has their own discretion to make a decision under the bilateral agreements with the Debtor.
    • To spread the credit risk.

Agencies

Bank Syariah Mandiri as an Agent is an intermediary between the Customer and the Facility Providers/Banks, and as the business administrator of the syndicated financing facility during the period of the syndicated financing. Upon signing the Syndicated Financing Contract, the Agent will discharge the duties until the Syndicated Financing Facility is repaid. Broadly speaking, the Agent helps all the parties to ensure that all the parties to the syndicated financing have acquired their rights and obligations.

1. Facility Agent

Bank Syariah Mandiri helps the Customers and syndication participants in complying with the conditions precedent and other covenants, disbursing syndicated financing facilities and repaying them, calculating the margins/leases/profit sharing of syndicated financing facilities, monitoring and distributing necessary reports.

Purposes & benefits for Customers:

  • More efficient as the Customer only deals with the Facility Agent.
  • To facilitate the calculation of margins/leases/profit sharing as already calculated by the Facility Agent.
  • Easier to find a solution in dealing with any arising problems.

Purposes & benefits for Facility Providers/Banks:

  • To help the Facility Providers in monitoring the Customers’ compliance with the conditions precedent and other covenants.
  • The calculation of margins/leases/profit sharing is already calculated by the Facility Agent.
  • Easier to find a solution in dealing with any arising problems.

2. Security Agent

Bank Syariah Mandiri helps the Customers in keeping and administering and updating all the syndicated loan security documents, monitoring the Security Coverage Ratio, security insurance, inspection of the secured goods and monitoring the Appraisal Report.

Purposes & Benefits for Customers:

  • More practical and efficient
  • Easier to monitor the validation of security and insurance documents as they are administered by the Security Agent.

Purposes & Benefits for Facility Providers/Banks:

  • To help the Facility Providers in resolving problems related to the encumbered security.
  • To execute security with the approval of the Facility Providers.
  • To help monitor the administration of documents related to the financing security.

3. Escrow Agent

Bank Syariah Mandiri helps the Customers in monitoring and managing accounts, especially in the project financing. Included in the Escrow Agent service are monitoring the balance and flow of funds from and to the Escrow Account, a payment obligation (fees, margins/leases/profit sharing, principal debt installments, etc.), submission of reports (accounts, etc.) to the relevant parties, rendering of advice on the appropriate account structure, and provision of the mechanism for controlling the use of funds.

Purposes & Benefits:

  • To ensure that the funds in an escrow account are allocated under the account management agreement.
  • To facilitate the Facility Providers/Banks in monitoring the Customer’s use of funds.
  • Account activity reports from the Escrow Agent can be used as the Early Warning Tools to detect Customer's cash flow problems.
  • To facilitate the Customers in the calculation and use of funds (cash management).