Mandated Lead Arranger
Encyclopedia
Financing for a major project finance
d project will be arranged by a bank or group of banks termed the “lead arranger(s)”.
The mandated lead arranger (MLA) generally has the leading role in this financing stage of a project. He often underwrites the financing, then handles syndication
or builds up a group to underwrite the full amount and syndicate. As a requirement of its mandate from the project sponsor, the MLA will be committed to raise the complete debt financing, which for a major project could be many hundreds of millions of dollars. But, commercial lenders typically do not want to take more than about US$50 million of debt for a particular project and will want to pass some of the debt, and hence some of the risk, to other lenders. The process of selling the debt is called syndication.
In large deals with multiple tranches, there may be an arranger for all, or there may be a separate arranger for each tranche. During the syndication process one of the banks may fulfil the role of book runner. This role of the book runner is simply to keep a record of how much debt each of the potential syndication banks wants to take.
The MLA is paid either through an arranger fee, through skimming or through structuring fees.
Project finance
Project finance is the long term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of the project sponsors...
d project will be arranged by a bank or group of banks termed the “lead arranger(s)”.
The mandated lead arranger (MLA) generally has the leading role in this financing stage of a project. He often underwrites the financing, then handles 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....
or builds up a group to underwrite the full amount and syndicate. As a requirement of its mandate from the project sponsor, the MLA will be committed to raise the complete debt financing, which for a major project could be many hundreds of millions of dollars. But, commercial lenders typically do not want to take more than about US$50 million of debt for a particular project and will want to pass some of the debt, and hence some of the risk, to other lenders. The process of selling the debt is called syndication.
In large deals with multiple tranches, there may be an arranger for all, or there may be a separate arranger for each tranche. During the syndication process one of the banks may fulfil the role of book runner. This role of the book runner is simply to keep a record of how much debt each of the potential syndication banks wants to take.
The MLA is paid either through an arranger fee, through skimming or through structuring fees.