participation

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Participation

The amount of loan or bond issue taken directly from another direct lender or underwriter.

Participation

A very large loan made by more than one lender to a single borrower. A participation loan exists when the lenders have a legal limit on the maximum amount they may lend.

participation

see EMPLOYEE PARTICIPATION.

participation

The practice of a lead lender selling portions of a loan to other lenders, called participants. It may be done because the loan is larger than the regulatory limits for the lead lender, or because the loan is very attractive but rather risky, so several lenders will pool their efforts and spread the risk.FDIC regulations that went into effect on January 1,2002,dramatically changed the structure and accounting for many participations. Formerly, lead banks could agree to repurchase a bad loan from a participant. As a result, it was easier to sell shares to other banks because the participants had no risk.Today,such a repurchase agreement will cause the transaction to be treated as a loan from the participant to the lead,rather than a sale,with the result that the lead may be in violation of banking regulations regarding loan size.

References in periodicals archive ?
What these numbers suggest is that there is a strong connection between levels of youth political participation and the relative openness of the public sphere.
The city is paying rent on one hand, and is receiving a participation in the net profits.
99% participation in Brazilian satellite operator Star One as well as the company's 28.
Standard & Poor's believes that the rating of subnational debt backed by tax participations, if structured correctly, could be rated higher than the issuer's credit rating.
5 million finance round, led by ABN AMRO Capital and GE Equity, also included investments from, Pythagoras Participations cvba.

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