What is a 'Lead Bank'

A lead bank is a bank that oversees the arrangement of a loan syndication. The lead bank is paid an additional fee for this service, which involves recruiting the members and negotiating the financing terms. In the eurobond market, the lead bank acts in an agent capacity for an underwriting syndicate.

BREAKING DOWN 'Lead Bank'

"Lead bank" can also refer to an investment bank that manages the process of underwriting a security. In this sense, the bank can also be referred to as a lead manager or managing underwriter.

A third meaning of this term is simply the primary bank of an organization that uses several banks for several different purposes.

RELATED TERMS
  1. Underwriter Syndicate

    A temporary group of investment banks and broker-dealers who ...
  2. Agent Bank

    A bank that acts in some capacity on behalf of another bank. ...
  3. Syndicate

    A professional financial services group formed temporarily for ...
  4. Distributing Syndicate

    A group of investment banks that work to underwrite and sell ...
  5. Syndicated Loan

    A loan offered by a group of lenders (called a syndicate) who ...
  6. Lead Underwriter

    A investment bank or other financial outfit that has the primary ...
Related Articles
  1. Insurance

    What is a Syndicate?

    A syndicate is a group of professionals that temporarily form into one entity to handle a large transaction that’s too big for each to handle alone.
  2. Investing

    What is a Syndicated Loan?

    A syndicated loan is one that involves a group of lenders (called the syndicate) who pool their lending resources to make a loan.
  3. Insurance

    The Rise Of The Modern Investment Bank

    Get to know a little bit about the institutions whose actions help to guide free markets.
  4. Trading

    What are Eurobonds?

    Eurobonds entice investors with small par values and high liquidity, but they are subject to exchange rate risk, which can quickly and dramatically affect their returns.
  5. Insurance

    What is Underwriting?

    Underwriting is a term most often used in investment banking, insurance and commercial banking. Generally, underwriting means receiving a remuneration for the willingness to pay for or incur ...
  6. Investing

    What's a Correspondent Bank?

    A correspondent bank is a bank that acts on behalf of another bank, usually a foreign bank.
  7. Personal Finance

    What Does a Merchant Bank Do?

    A merchant bank is a financial institution that performs underwriting, loan services, financial advising and fund raising services to large corporations.
  8. Insights

    The Role of Commercial Banks in the Economy

    We interact with commercial banks daily to carry out simple financial tasks. That said, the function and creation of a commercial bank is anything but simple.
RELATED FAQS
  1. How does an underwriter syndicate work together on an initial public offering (IPO)?

    Learn how underwriting syndicates work together when helping a company undertake an initial public offering, and learn about ... Read Answer >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. What is the difference between loan syndication and a consortium?

    Learn about consortiums and loan syndications, two types of multiple banking arrangements designed to finance transactions ... Read Answer >>
  6. What are the typical repayment terms for a syndicated loan?

    Learn more about syndicated loans and how they are structured, specifically including the typical repayment terms for a syndicated ... Read Answer >>
Trading Center