Mandated lead Arranger/Arranger/Lead Arranger (captain of the syndication ship) :-
o Mandated lead arranger/arranger/lead arranger has to co-ordinate all the activities at various stages of handling proposal and raising the fund from Banks/Financial Institutions.
o Role of lead arranger/Mandated lead arranger (MLA):-
The customer nominates lead Bank. It is very importer factor for a customer to nominate lead
arranger in the light of maintaining long term relationship
It leads to a lead arranger being an agent Bank of syndication, which is very common syndication investment process. For this reason it should be an organization with which the customer is likely to feel comfortable over the whole investment period.
After analyzing all the relevant aspects of risk, lead arranger helps the customer by taking proper step and will set a plan to raise the fund from the Banks/Fls to set up the proposed project. A time schedule to be prepared by the lead arranger to close the syndication deal
A good professional arranger will always be able to add something to a customer’s own deliberations. It should be able to suggest amendments/value additions, which will make it easier for a syndicate to take up the investment without compromising its essential elements.
It is very important that the lead bank has an in-depth knowledge of the individual customer. This applies not only to the particular company but also to the wider environment in which it works, the economic pressures, the competitive environment and so on.
As part of the process of selecting a potential syndicate leader it will be necessary to decide whether it can sell this deal to the sort of syndicate that is desired. If a high-quality group is the aim, then a high level of past performance in similar transactions will be required in order to encourage other experienced into the syndicate.
Credibility can be equally important when dealing with less heavyweight players, who will to a much greater extant on the senior members of the syndicate.
The lead Bank/arranger has responsibility for much of the selling of the investment to participants.
The lead Bank will be the first port of call for question and needs to be able to answer them authorities in order to head off problems and sensitivities before they arise. This role will be particularly important with respect to syndicate members who do not know the borrower particularly well.