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The Law of Multi-Bank Financing: Syndicated Loans and the Secondary Loan Market Agasha Mugasha (Oxford: Oxford University Press, 2007) 673 pp. US$355
Professor Mugasha' s book is a thorough examination of syndicated lending. It replaces, and improves on, his earlier book, The Law of Multi-bank Financing: Syndications and Participations. l In broad terms, a syndicated loan involves several lenders combining to lend to one borrower. The lenders contract on a single set of documents in such a way that, while there are separate contractual relationships with the borrower, these relationships are on the same terms and each lender is restricted in their ability to act independently of the wishes of the other lenders. This structure is a mainstay of international - and, indeed, domestic - finance. London has been one of the main global centres through which such lending has been arranged since the early nineteenth century, when leading banking houses, such as Rothschilds and Barings, organised syndicates of European banks to finance major capital projects across the world, including railroads in the railway building boom. In common with much of international finance, the complex and even intimidating nature of syndicated loan contracts arises from the number of parties involved, which increases the length of the documentation, but it also is the result of the obscure terminology employed. Professor Mugasha is to be congratulated for providing confused neophytes - and even those who have a reasonable grasp of the issues - with a guide through the argot and neologisms, the parties and the documentation.
The book begins with an introduction that describes multi-bank financing, although Mugasha does briefly note the role of non-bank participants, which, subsequent to the publication of this book, has increased because the problems faced by banks since 2007 have constrained their ability to lend and so opened possibilities for non-bank firms to enter this market. Mugasha describes the primary transactions, whereby lenders enter into a loan contract with the borrower, and the secondary market, whereby syndicate members pass their interest or part of their interest in the original loan to another party. He gives a good deal of attention to the problems involved in effecting such a transfer and the methods that may be employed to evade these difficulties, including...