Agent Bank

What is an 'Agent Bank '

An agent bank is a bank that acts in some capacity on behalf of another bank. It can mean any of three types of bank:
(1) The bank in a loan syndicate that advises other participating banks of advances taken and changes in interest rates for a foreign or domestic borrower
(2) A bank that participates in the credit card program of another bank by issuing credit cards and performing other duties (excluding financing card receivables)
(3) A foreign bank doing business in the U.S. on behalf of its parent bank, performing such tasks as issuing international letters of credit, but not accepting deposits

Also known as an "agency bank."

BREAKING DOWN 'Agent Bank '

A syndicate manager will receive a mandate from a borrower to arrange a syndicated loan. After the agreement closes, the duties of the syndicate manager end. At that point, the syndicate manager is usually appointed the agent bank, which coordinates the loan between the borrower and participating banks.

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RELATED FAQS
  1. Under what circumstances might a syndicated loan be arranged?

    Learn about the types of syndicated loans, why some lenders choose to establish or join a syndicate, and why some borrowers ... Read Answer >>
  2. Who generally structures a syndicated loan?

    Learn what syndicated loans are, including how they are structured and administrated, usual payment terms and costs associated ... Read Answer >>
  3. What is considered a reasonable interest rate for a syndicated loan?

    Discover how syndicated loans work, why they are beneficial for businesses, and what is considered a reasonable interest ... Read Answer >>
  4. What is the difference between loan syndication and a consortium?

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  5. How risky is a syndicated loan for the lender?

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  6. What are the typical repayment terms for a syndicated loan?

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