Administrative agents on syndicated loan facilities periodically resign. An administrative agent may resign for a number of reasons, including because it is no longer a lender in the syndicated loan or because of a perceived or actual conflict of interest.
Administrative agents handle the routine responsibilities and duties necessary for the orderly administration of a syndicated loan. Once a syndicated loan closes, payments and communications between the borrower and lenders are made through the administrative agent. Other duties of the administrative agent include setting interest rates, maintaining the register, and processing any loan trades.
The resignation of an administrative agent can interrupt the orderly administration of a syndicated loan if not handled correctly. Fortunately, syndicated loans are flexible and the process of appointing a new administrative agent can be managed to prevent undue difficulty.
Topics covered in this white paper include:
- Why would an Administrative Agent Resign?
- How is the Resignation Process Initiated?
- What Happens if a New Administrative Agent is not Appointed?
- Appointing a New Administrative Agent
- What if the Collateral Agent Resigns?
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