Syndicated Financing

The Middle East Bank is ready to take part in syndicated agreements with other banks to cooperate in financing requests that exceed the limits of amounts set by the Central Bank or credit policies.

In this process, multiple banks, in cooperation with each other and designating one bank to act as the lead agent on the syndicated loan, extend the loan. This method overcomes the bank's capital insufficiency with regard to its general obligations and limits and distributes the risks of megaprojects among the banks. In the preliminary stage, the applicant negotiates with banks on the requested finance, his capability to repay the loan and the interest rate. If a bank reaches a preliminary agreement with the applicant, it will be responsible for gathering information on the customer's credit status, the purpose of the loan, terms and conditions of the loan, feasibility study of the project, as the leading bank. then submits mentioned information with an invitation letter to other financial institutions which have long term cooperation with the bank.

Through negotiations and meetings between the leading bank and other financial institution, interested in lending, the contribution of each bank to the syndicate is set. The syndicate members also designate one of the member banks as the agent bank and eventually the syndicated loan agreement is signed by the syndicate members. Now, the agent bank, in line with the loan syndication agreement, carries out the loan administrative issues (opening an account for the management of the loan proceeds, informing other syndicate members of the schedule for allocating the share/committed funds of each bank (out of total), carrying out official legal and procedural issues regarding securities and collaterals and management of the same, disbursement of the loan, collecting principal and interest from recipient and distribution of which among members, collecting fee charges, oversight on how the applicant carries out the contract, management, supervision and monitoring the use of funds and producing periodical reports for the members, etc).

The procedure that mentioned above could be used for guaranteeing debt securities (Sukuk) which exceed the limitation that are set by central bank.