The leading bank in syndicated loans.
The research project seeks to clarify the role of the leading bank in syndicated loans. These are loans in which two or more banks join together to lend to a single borrower on the basis of a single set of documents. To co-ordinate this multi-party agreement, a leading bank (agent bank and/or security agent/trustee) is appointed, which, inter alia, manages the payment flows and the security interests. In the absence of a general trust concept, practitioners on the Continent have turned to obligational constructions of which the validity is uncertain and which do not provide an adequate protection in case of insolvency of the leading bank. After a critical evaluation of those constructions, this research project aims at developing a more efficient and certain way to conceptualize the leading bank. Moreover, this project will research at an abstract level the extent to which the project results can be extrapolated to other multiparty contracts with a leading party (bond-issues, securitization, patent pools, coinsurance).