A flexible syndication alternative

Originate, split & distribute

For originators accustomed to syndicating loans, CrossLend offers a viable and attractive alternative.

Under syndication, originators must find new co-investors whenever they write loans that would breach their internal exposure limits. These investors can often be heavily involved in the borrower relationship and in the structuring of the loan itself, therefore questions always remain: will the terms requested by the co-investors be too restrictive and will the co-investors compete for the borrower’s business next time?

Protection of the borrower relationship

Under CrossLend’s originate-to-distribute (OTD) mechanism, you can retain your close relationship with the borrower. Borrower identities are not disclosed to investors – only anonymised payment histories and risk classification are disclosed.

Expanded origination capacity

With a formalised forward flow agreement in place, you can expand your origination capacity. You need not worry about your ability to offload loan exposure or about starting conversations with and later disappointing a borrower. You can simply focus on what you do best – origination.

Unlike syndication, investors agree to purchase a portfolio of loans.

Europe-wide investor base

With syndication, investors are quite commonly the competitors of the originator looking to syndicate the loan. They are the companies that are the most familiar with underwriting individual loans.

Investors interested in the portfolios of loans, on the other hand, don’t tend to be so concerned with the underwriting of individual loans. They are focused on assessing the general underwriting quality of the originator.

CrossLend’s European-wide institutional investor base helps you to not only obtain funding outside of your local market, but also to target “loan portfolio” investors who are not your competitors.

Standardised legal structure

The costs associated with syndication can be expensive. Perennial syndication structuring necessitates the reassignment of legal and operational personnel to those projects and takes the focus away from gaining additional new business.

Moreover, originators often require a large bank to be the lead lender in the structure, meaning they have to pay fees to that bank.

CrossLend offers a solution: the ability to engage in deals with replicable and robust legal structures without the usual costs and without the reassignment of personnel. These deals can be structured within our authorised Luxembourg special purpose vehicle (SPV), a white or grey label SPV solution, or an alternative entity proposed by the originator.

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