Borrowing in International Financial Markets

Course details

This course is an introduction to a transaction in which the Buyer (an industrial Company) acquires a business unit from a Seller which is located in a foreign country. The Buyer agrees to make a cash payment for the acquisition to the Seller at the closing of the transaction. The Buyer obtains the needed amount of money By taking a syndicated bank loan from a group of bänks which act jointly in this transaction in the form of a syndicate.                                      

As a result, the Company making the acquisition can raise a much larger loan from the bank syndicate than what it could obtain from a single bank. On the other hand, the bänks which participate in the syndicate can limit their credit risk to a much smaller amount than what would be the case if a single bank gave the full loan to the Company making the acquisition.