what is a lead bank 
a lead bank is a bank that oversees the arrangement of loan syndication the lead bank receives an additional fee for this service which involves recruiting the syndicate members and negotiating the financing terms in the eurobond market the lead bank acts in an agent capacity for an underwriting syndicate a lead bank is also known as a lead underwriter understanding lead banksa lead bank usually refers to an investment bank that manages the process of underwriting a security in conjunction with other banks known as syndicate banks in this sense the lead bank can also be referred to as a lead manager or managing underwriter a more general meaning of this term is simply the primary bank of an organization that uses several banks for several different purposes the lead underwriting bank will usually work with other investment banks to establish an underwriter syndicate and thereby create the initial sales force for a company s securities these bonds or shares will then be sold to institutional and retail clients the lead bank will usually be the one to assess the company financials and current market conditions to arrive at the initial value and quantity of shares to be sold these securities often carry a hefty sales commission as much as 6 to 8 percent for the syndicate with the majority of shares being held by the lead bank the role of the lead bank in loan syndicationin loan syndication multiple banks will work together to provide a borrower with the capital needed loan syndications generally form for corporate borrowing purposes including for mergers acquisitions buyouts and other capital projects situations that require loan syndication will usually involve a borrower who needs a large sum of capital that may be too much for a single lender to provide and or outside the scope of this lender s risk exposure levels a lead bank in this case is often responsible for all aspects of the deal including the initial transaction fees compliance reports repayments throughout the duration of the loan loan monitoring and overall reporting for all lenders within the deal lead banks of loan syndications may charge high fees because of the vast reporting and coordination efforts needed to complete and maintain loan processing these fees can be as high as 10 of the loan principal at times the lead bank may rely on a third party and or additional specialists throughout various points of the loan syndication or repayment process to assist with reporting and monitoring the role of the lead bank in securities underwritingin an initial public offering ipo or other forms of issuing securities a lead bank may organize a group of underwriters also called the underwriting syndicate for the deal as with a loan syndicate the purpose of an underwriting syndicate is often to spread out risk and or merge funds in a large deal lead banks will assess an issuing company s financials and current market conditions to arrive at an initial value and quantity of shares to be sold newly issued shares may carry a hefty sales commission for an underwriting syndicate at times nearly 6 8 however the largest portion of shares will go to the lead bank 