A syndicated loan: a. represents a loan by a single bank to a syndicate of corporations. b. represents a loan by a single bank to a syndicate of country governments. c. represents a direct loan by a syndicate of oil-producing exporters to a less developed country. d. represents a loan by a group of banks to a borrower. e. A and B

Question

Kenya Crane

Business

20 August, 13:03

A syndicated loan: a. represents a loan by a single bank to a syndicate of corporations. b. represents a loan by a single bank to a syndicate of country governments. c. represents a direct loan by a syndicate of oil-producing exporters to a less developed country. d. represents a loan by a group of banks to a borrower. e. A and B

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Answers (1)

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Nikhil Turner · Answer 1

The correct answer is option d.

Explanation:

The syndicated loan is also called syndicate bank facility. Under this facility more than one bank provide loan to a single borrower, which may be a corporation or a government.

This is generally used when the size of a project is very large no single lender wants to bear the risk alone. Syndicated loans spread risks among the lenders, thus reducing the rate of risk on a single lender.