syndicated loan

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A loan provided by a syndicate of banks or other lending institutions. Such loans, often to less developed countries, are usually arranged by one or a small group of leading banks negotiating the terms and persuading a large number of other lenders to take up small parts of the loan. Participating in a number of syndicated loans gives lenders a less risky portfolio than negotiating loans for themselves with particular borrowers: borrowers can negotiate terms with a single body which they can trust to be able to raise the money by recruiting other lenders to join a syndicate.

Subjects: Economics.

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