It is often stated that a key principle of syndicated loans is that the lenders share risks in proportion to their commitments to lend (often referred to as the “pro rata” principle).
Please describe how that principle is reflected in the provisions dealing with utilisations or drawdowns (clause 5 of the LMA sample agreement) and with payments (clause 29) and sharing among the finance parties (clause 28).
Please also discuss whether, and the extent to which, that principle is reflected in the provisions relating to decision-making by the syndicate in relation to acceleration and enforcement following an event of default by the borrower.
