Syndicated bank lending has become a highly significant means of providing loan capital, particularly in emerging markets. A syndicated loan is a means of sharing risk between lenders, and allows a degree of participation that reflects each lender’s view of the borrower and the nature of their requirement for funds. Since the 1970s, syndicated loans have been increasing their share of global capital markets, and today represent more than a third of all international financing.
The need for development capital is frequently greater in emerging economies, where access to established capital markets can be more difficult. Hence the need for specialised services in this arena, provided by organisations that have deep knowledge of the banking and financial services sector, and are also able to interpret the requirements of borrowers in emerging markets.
EMFC Loan Syndications LLP (“EMFC“) was established in 2012 with exactly this objective: to act on behalf of the borrower by becoming a key member of their internal finance team, and to lead the creation of a financial model and due diligence information that will support the raising of the right type of loan from the right type of lenders. EMFC will work closely with the borrower to gather all of the information needed to support the loan credit process, and follow through by project-managing the transaction, including involvement in the bank syndication activity.
In order to provide this service effectively, EMFC must first gather, and then share, large amounts of information. The nature of this information is very sensitive – hence the need for a highly secure platform to hold and manage all of the necessary documents while they are being prepared and made ready for submission to the lending banks. EMFC started working with Safe4 in 2013, having established that the unique data model offered by Safe4 provided an ideal means of controlling all of the data needed for the execution of the process. The comprehensive permissions and access controls available in Safe4 give all parties the ability to see just the information they need to perform their function. Full audit trails and extensive reporting facilities also allow Safe4 to be used as a legally-compliant system of record.
Sophie Papasavva, founding partner of EMFC, has held senior banking positions with J P Morgan and Standard Bank of South Africa, and recognised the benefits that using a flexible and secure service such as Safe4 would bring. Sophie believes that “whilst there are specialist tools available to help manage the syndicated lending process, they are costly to use and somewhat rigid in their approach, and are not necessarily ideal for use among emerging market borrowers. EMFC needed a partner who would listen to our requirements and make sure that the service was fit for purpose in the lending and borrowing communities we serve. Safe4 have made changes to their system to support some of the very specific functional requirements that we identified, and now the system has proved to be a valuable tool for EMFC.”
Sophie believes that Safe4 has brought some very specific benefits for EMFC. She has summarised these by highlighting some significant points:
“Safe4 has brought us some valuable advantages in our highly specialised business. It gives us:
- Highly confidential transactions support – very secure documentation management system
- Information Memoranda and loan agreements are bulky documents – our focus on emerging markets often means banks have limited mailbox sizes – Safe4 never uses email to transfer documents, and therefore never clogs up any mailboxes
- Ability to check and confirm invitees have actually accessed and downloaded the information
- Multiple lenders invited – ability to ring-fence each, thus controlling the level of information disseminated even within a transaction
- Speed and ease of access to all transaction documents by all parties
- Adds to professionalism of the service EMFC offers as compared to exchange of documents over e-mail, which is now a very high-risk means of communication
- Far more cost effective than other file management systems that try to do more (and remain underutilised and overpriced)
We hope to continue working with Safe4 to add value to our business, and to the borrowers and lenders for whom we work.”
Ben Martin, Director of Safe4, is delighted at the way the relationship with EMFC has developed. “Sophie showed great business insight in identifying the ability of Safe4 to support the complex and confidential transactions that EMFC helps to manage. Her input to the development of the system has been of real value to us, and we hope to be able to work closely with EMFC as they develop their growing reputation in today’s highly sophisticated financial services world.”
For more information on how Safe4 can help with the delivery and storage of highly confidential information, please refer to the Contacts Page on this website. We will be very pleased to assist you.
Safe4 Information Management