Loan Participations: What You Should Know
When a bank enters into a lending arrangement with a borrower, or some time thereafter, the bank may wish to sell a portion of the loan to another bank.
Or a bank may wish to purchase a portion of a loan made by another bank. Such transactions may occur in connection with short-term borrowings, term loans, construction loans or other forms of extension of credit.
This area of lending is closely monitored by banking regulators because of the inherent risk in this type of lending, and banks’ failure to take precautions to avoid undue problems.
Learn the basic requirements for successful loan participations or syndications.
This presentation will help banks that buy or sell participations among affiliate banks or to unrelated institutions. Leave with a firm understanding of minimum required standards to purchase and sell loan participations or participate in loan syndications to remain in compliance with sound banking practices.
- Purpose of Loan Participations and Basic Rules
- Difference between Loan Participations and Loan Syndications
- Regulatory Rules Governing Loan Participations
- Role of the Originating Bank and its Relationship with Participating Banks
- Legal Rights of Participating Banks
- Review of the Certificate of Participation and other Required Legal Documentation
- Basic Operational Procedures Required for Loan Participations
- Latest Development on the American Institute of Certified Public Accountants concerns about LP
Loan Officers, Senior Credit Officers, Senior Loan Officers, Loan Administrators, Loan Review Officers, Compliance Officers, Branch Managers, and Credit Analysts
Jeffery W. Johnson started his career with SunTrust Bank in Atlanta as a Management Trainee and progressed to Vice President and Senior Lender of SouthTrust Bank and Senior Vice President and Commercial Banking Division Manager for Citizens Trust Bank of Atlanta.
Most of his career has been spent in Credit Administration, Lending, Business Development, Loan Review, Management and Training & Development. He has managed loan portfolios representing a cross section of loan types including: Large Corporate, High Net Worth Individual, Middle Market Companies, Small Business, Real Estate and Non-Profit Organizations.
Mr. Johnson is now a training professional in the financial industry by leading various seminars covering important topics relating to issues in financial institutions. He teaches actively for fifteen state banking associations in the United States, Risk Management Association (RMA) and individual financial institutions nationwide. He co-authored a training course entitled “Lending to Service and Other Professional Organizations” for RMA in 2001.
Mr. Johnson earned a B.A. Degree in Accounting from Morehouse College in Atlanta; a MBA in Finance from John Carroll University in University Heights, Ohio; Banking diploma from Prochnow School of Banking at the University of Wisconsin and a Graduate Certificate in Bank Management from the Wharton School of Business at the University of Pennsylvania.
Institute of Certified Bankers: Visit http://www.icbmembers.org/login.aspx for instructions regarding self-reporting. Estimated credits: 2.5 CE Credits
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