Consortium bank
Konsortialbank is a credit institution that acts as a member of a banking consortium and has been entrusted with the execution of a specific banking business within the framework of this consortium .
species
The most common types of syndicated business are the issuance of securities on the capital market ( stocks , bonds ) or to private investors (issuing syndicate ) , the granting of loans ( syndicated loan ) or the joint management of loan collateral within the framework of a collateral pool .
Legal bases
According to German law, the credit institutions combined in a consortium form a company under civil law (GbR or BGB-Gesellschaft) according to § § 705 ff. BGB . A consortium of this type can be organized as an internal or external consortium, depending on whether the bank customer is informed about the establishment of a bank consortium or not.
The external consortium enters into contractual relationships with the bank customer as such, with the consortium leader also acting on behalf of the consortium with regard to the bank customer. In the case of the internal consortium, the lead manager acts exclusively in his own name, but for the account of the consortium banks, which are made known to the bank customer in the open internal consortium. In the case of the internal consortium, legal relationships also only exist between the bank customer and the consortium leader. Only as an external consortium does it enjoy legal and party status and can thus become the owner of a claim or debtor of the bank customer. In deviation from Section 709 of the German Civil Code (BGB), the management authority rests with the consortium leader, which at least includes conducting negotiations with the bank customer. According to the case law of the Federal Court of Justice, the consortium banks are accessoryly liable for breaches of duty by the consortium leader.
This external liability can be divided into the internal liability within the consortium in the consortium contract. For the internal relationship between consortium and the underwriters the rules apply on the agency agreement (§ 675 § ff. BGB). In the case of a centralized consortium, the business is handled by the lead manager, who invoices proportionately internally with the syndicate banks, which is why the internal consortium is regularly run as a centralized consortium. The sole creditor of the claims and sole debtor of the services is in both cases the lead manager, so that the bank customer only has to balance a single claim / liability against this.
The offer of a consortium to issue securities counts as an invitatio ad offerendum and not as an offer within the meaning of § 145 BGB, because it only makes an invitation to submit purchase offers to the investors . The interested investors submit the offer themselves.
Members of the consortium
The consortium is structured strictly hierarchically. The consortium leader, who usually also takes on the higher syndicate quotas, leads the syndicate banks.
Consortium leader
The lead manager ( English Sole Mandated Lead Arranger ), or the lead manager ( english joint mandated lead arrangers ) takes over as primus inter pares coordination between the consortium and the bank customers both in the creation of the consortium as well as in managing the syndicate business. Contrary to Section 709 of the German Civil Code (BGB), he is responsible for the sole management authority, which at least consists of conducting negotiations with the bank customer. As a rule, the consortium leader assigns the highest consortium quotas.
Syndicate banks
The consortium banks can - depending on the size of the consortium - be divided into lead arrangers , arrangers and mere participants . This hierarchical structure is only related to the consortium quotas that have been adopted and otherwise has no legal effects. The consortium banks assume a certain percentage of the total volume of the consortium agreement, the so-called consortium quota. In order to limit the liability of the consortium banks to their consortium quotas, an express limitation of liability in the consortium agreement is necessary, whereby an externally identified regulation in the internal relationship is not sufficient.
Consortium reservation or underwriting
A (severe) or syndication Konsortialvorbehalt of the consortium is under the condition that the final amount of the lending or the final height of the placement volume of securities from the dependent to the receiving Konsortialanteilen the Underwriters ( English effort best ). The lead manager makes the granting of a syndicated loan or the placement of an issue dependent on the consortium's existing consortium commitments. If the planned loan amount or the planned issue volume is not achieved, the consortium agreement will either not be concluded or only in the amount of the consortium commitments made / the volume placed. In this case, issuing syndicates (securities) are issuing syndicates that are subject to the regulation of section 1 (1) sentence 2 no. 4 KWG (finance commission business).
With underwriting, on the other hand, the lead manager undertakes to provide a precisely defined loan amount or to take over the entire issue amount, without the entire consortium shares of future syndicate banks being important; The lead manager runs the risk of having to represent, place or take over the entire loan amount or the entire issue alone in the worst case ( takeover consortium ). For regulatory purposes, underwriting is considered an issuing business in accordance with Section 1 (1) Sentence 2 No. 10 KWG.
Consortium agreement
In the case of a consortium contract, a distinction must be made between the actual content of the contract and the typical consortium regulations. The actual consortium agreement (such as a loan in the syndicated loan or securities in the underwriting syndicate) follows the regulations provided for this (i.e. loan or contract law). Typical consortium regulations such as the management of the consortium or liability ratios of the consortium banks follow the provisions of § § 705 ff. In conjunction with § 675 BGB. In the external consortium, the consortium contract is concluded in the name of the consortium, so that the consortium with legal capacity is authorized and obliged; the lead manager represents the consortium banks.
The British Loan Market Association and its US counterpart Loan Syndications and Trading Association have specialized in developing standardized syndicated agreements to facilitate negotiations on the consortium's subject matter and the internal relationship within the consortium for the consortium and their customers. In doing so, clauses were developed that have found their way into the contractual practice of banks (such as the material adverse change clause and covenants ). The contracts are structured according to the Anglo-Saxon case law and define any situation even considered unlikely. Certain minimum modules ( English boiler plates ) deal with the legal questions relevant to the contract.
Purpose and goals
Consortia are set up if the loan amount exceeds the reporting limits for the individual credit institution ( e.g. large loans pursuant to Section 13 KWG and Art. 392 Capital Adequacy Ordinance ), the issue volume is too large for an individual institution or if this would result in cluster risks for an individual bank . These risks are reduced by distributing them to various banks that are not affiliated with the Group . The consortium is thus an essential instrument for risk diversification. A consortium saves the bank customer from having to establish a large number of business connections with different banks with possibly different conditions, because he only has to communicate with the consortium leader and receives uniform conditions. Once the consortium is finally settled, the purpose of the consortium for which it was formed also ends.
literature
- Bernhard Steinrücke, Herbert Scholze: The syndicated business of the German banks , Duncker & Humblot, Berlin 1956, ISBN 978-3428014644 .
Individual evidence
- ↑ BGH NJW 1991, 2629.
- ↑ Dorothee Einsele, Banking and Capital Markets Law: National and international banking transactions , 2006, p. 311
- ↑ BGH NJW 2001, 1056.
- ↑ a b Peter Derleder / Kai-Oliver Knops / Heinz G. Bamberger, Handbook on German and European Banking Law , 2003, p. 457
- ^ A b Herbert Schimansky / Hermann-Josef Bunte / Hans-Jürgen Lwowski (Hadding), Banking Law Handbook , § 87 marginal number 34.
- ↑ BGHZ 146, 341, 343 ff.
- ↑ Thomas Eger u. a., Internationalization of Law and its Economic Analysis , 2008, p. 542.
- ↑ BGHZ 142, 315.
- ↑ Wolfgang Breuer / Thilo Schweizer / Claudia Breuer, Gabler Lexikon Corporate Finance , 2013, p. 154.
