How is the syndicate structured? Well, we start with a mandated lead arranger, that's the top of the tree, and then you'll have several tiers. The second tiers are typically called lead managers or lead arrangers. Then ultimately you just get arrangers or plain old participants. As you go down the pyramid, less fees are earned. You'll also need a documentation bank and an agent bank, and that is usually, but not always the mandated leader ranger. It's certainly someone who has an understanding of the market in that location. They'll be handling the money from the special purpose vehicle. The project needs to be absolutely sure that they're going to get the money, so typically these loans will be underwritten. In other words, the banks, the initial banks will give a kind of guarantee that they will provide the full financing as long as all the i's are dotted and the T's are crossed, and that's known as underwriting. Normally, you start with a small number of very large banks. They will be the co-leader arrangers, along with the mandated lead arranger, and these will also usually be the underwriters they're committed to providing the finance. The initial syndicate will try to sell down their exposure to other banks, and that's where you get these second tier of arrangers or third tier of these arrangers and participants, and they will get a smaller and smaller slice of the fees as you go down the pyramid. The agent bank, which does all the admin, will represent the syndicate and also collect and distribute the money. This again, is usually the MLA syndication strategy broadly fits into two buckets. Either you can have single stage syndication. Here, the mandated leader ranger will underwrite the whole deal. This is good to use when the market's confident, so you've got low interest rates, a lot of liquidity around and low volatility. This means that as the MLA, you can be pretty sure other banks will be interested when it comes to selling down the loan. The benefit of this arrangement, of course, is that the MLA will get the lion's share of the fees.

Alternatively, you can do a two stage syndication, so you start showing the deal initially with a few large banks, probably active in that geography or in that sector, and you'll get commitments from them from the underwriting. And this means you have to spread out those underwriting fees more widely than you would have if you just did a single stage. Then once you've done the initial stage, you go down to other banks and try and sell further portions of the loan. This is less risky, but as the MLA, you're going to get less return. This two stage method is typically used when markets are tough.