Arranger
Encyclopedia
In investment banking
, an arranger is a provider of funds in the syndication
of a debt
. They are entitled to syndicate the loan
or bond
issue, and may be referred to as the "lead underwriter". This is because this entity bears the risk of being able to sell the underlying securities/debt or the cost of holding it on its books until such time in the future that they may be sold. They do not necessarily acquire all the debt - this may be split into various parts and sold to a variety of Arrangers.
Prior to the syndication
of a loan and at the point where the loan documentation is signed, the title of "Bookrunner
" is allocated to the bank that commits to provide the loan
. This may be shared amongst several investors depending on the size of the deal. The "Arranger" is the entity (or entities) that subsequently agrees and negotiates the project financing structure. They will not necessarily be the same entity, although they often are.
Upon final signing of the full syndicate, the Bookrunner title may be forfeited to another lender. If amendments are made to the loan, the banks that committed to the original loan may retain their involvement in the deal as "Mandated Arrangers". The Bookrunner title is then assigned to the banks comprising the new lender group.
A bank may also be referred to as a "Lead Arranger", implying that they are more senior in the hierarchy of Arrangers involved in the deal.
For a coordinated series of bilaterals the Mandated Arranger title is allocated to the coordinators.
Investment banking
An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities...
, an arranger is a provider of funds in the syndication
Syndicated loan
A syndicated loan is one that is provided by a group of lenders and is structured, arranged, and administered by one or several commercial banks or investment banks known as arrangers....
of a debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
. They are entitled to syndicate the loan
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
or bond
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
issue, and may be referred to as the "lead underwriter". This is because this entity bears the risk of being able to sell the underlying securities/debt or the cost of holding it on its books until such time in the future that they may be sold. They do not necessarily acquire all the debt - this may be split into various parts and sold to a variety of Arrangers.
Prior to the syndication
Syndicated loan
A syndicated loan is one that is provided by a group of lenders and is structured, arranged, and administered by one or several commercial banks or investment banks known as arrangers....
of a loan and at the point where the loan documentation is signed, the title of "Bookrunner
Bookrunner
In investment banking, a bookrunner is usually the main underwriter or lead-manager/arranger/coordinator in equity, debt, or hybrid securities issuances. The bookrunner usually syndicates with other investment banks in order to lower its risk. The bookrunner is listed first among all underwriters...
" is allocated to the bank that commits to provide the loan
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
. This may be shared amongst several investors depending on the size of the deal. The "Arranger" is the entity (or entities) that subsequently agrees and negotiates the project financing structure. They will not necessarily be the same entity, although they often are.
Upon final signing of the full syndicate, the Bookrunner title may be forfeited to another lender. If amendments are made to the loan, the banks that committed to the original loan may retain their involvement in the deal as "Mandated Arrangers". The Bookrunner title is then assigned to the banks comprising the new lender group.
A bank may also be referred to as a "Lead Arranger", implying that they are more senior in the hierarchy of Arrangers involved in the deal.
For a coordinated series of bilaterals the Mandated Arranger title is allocated to the coordinators.