Explored: The Role of a Facility Agent19 Nov 2018
Following the recent introduction of Ocorian's Facility Agency capabilities to accompany our existing suite of corporate trust products, Ocorian's Director of Transaction Management, Chris Wilson, examines the key elements of the role in the evolving loan market.
What is a Facility Agent?
A Facility Agent acts as the primary point of contact between the transaction parties to a syndicated loan. They are appointed to manage the communication between the borrower and the lenders in addition to handling the flow of funds and providing ongoing transaction support. As a result, the appointment of the Facility Agent is a key one in the context of loan-based transactions.
Why use an independent Facility Agent?
In a market subject to stringent regulations combined with a need to effectively manage potential conflicts of interest - especially in workout or restructuring scenarios - lenders increasingly find themselves seeking independent service providers to administer the agency aspects associated with their portfolios. This occurs either from the outset or by stepping in as a successor agent during the lifespan of the transaction.
In terms of independence, a true third party Facility Agent will have no other commercial interest in a transaction, thereby positioning itself to be able to operate in a conflict-free environment.
A Facility Agent also needs to have extensive market experience and specialist knowledge to support a service offering covering a wide range of loan financing, extending to complex leveraged finance, multi-currency transactions.
Offering a bespoke client service as well as operating a streamlined new business on-boarding process is paramount. This enables the Facility Agent to promptly assess a transaction and be responsive to client needs in a market where speed and flexibility are of upmost importance.
To learn about Ocorian's Facility Agent and Loan Administration offering, click here.