Expanding Corporate Citizenship via Syndicated Loans

Throughout 2020, governments across the region required extraordinary support to maintain public services, help SME's, provide income to disproportionately affected citizens, and other forms of emergency funding to bridge the fiscal gap created by the Pandemic. We leaned into these opportunities with an unwavering commitment to deliver value to our sovereign stakeholders while upholding our ethical standards of fair pricing, despite changing credit profiles. In many cases, we structure these deals as syndicated loans, which benefit both Borrowers and Lenders.

Large sovereign deals typically require collaboration amongst regional and domestic financial institutions to successfully fund the transaction. Lenders form a syndicate and combine their resources to build capacity to meet the required funding level. However, in many cases, smaller, high-risk deals are syndicated to manage risk by limiting individual Lender exposure.

Syndication benefits Lenders in several ways, including harmonizing underwriting practices, which provides an opportunity to understand competitor processes and share best practices. Additionally, syndication improves risk management by sharing funding allocations amongst lenders, reducing concentration risk, and allowing Lenders to participate in larger or more risky facilities than their capital base may normally permit. In aggregate, syndication serves a dual purpose of achieving the funding objective while facilitating investment diversification to lenders.

We aim to establish a leadership role in syndicated facilities based on our robust underwriting practices and commitment to achieving our clients' objectives. We share information about the project, project sponsor, historical and projected financials, legal and regulatory considerations, and relevant macro-economic factors with syndicate members via a private data room within the syndication process. We work with the project sponsor to develop an investment rationale and credit profile of the project and communicate our perspective to potential Lenders. This process is critical to ensuring that Lenders can accurately assess the strengths and risks of the investment opportunity and thereby facilitate the project's successful funding.

Republic is a uniquely Caribbean Bank and the largest indigenous financial institution in the region. We have a vested interest in the region's prosperity and take pride in our role as corporate citizens to support and develop our Caribbean economy, governments, businesses, and people by providing access to capital.