When it comes to syndicating a loan across multiple banks, most companies believe that once they select a lead bank, the majority of their work is done.  

But you aren’t like most companies, are you? 

When it comes to syndicated loans, delegating a lead bank too early can cost you control, pricing power, and flexibility. The truth is that the best outcomes often start before the syndication even begins. 

For years, corporate financing strategy has defaulted to syndication, especially for larger, secured credit facilities. It’s efficient and scalable. However, it’s also a structure that often prioritizes bank convenience over borrower outcomes. 

At Redbridge, we are seeing more treasury and finance leaders challenge this model. By engaging lenders earlier through bilateral discussions, companies can shape stronger outcomes ahead of a syndication process. 

The Problem with Traditional Syndication

The idea of allowing a single bank to manage the process may seem appealing at first. However, this deal structure often favors the lead bank selected, and not the borrower. Here’s what usually gets overlooked: 

• Conflicts of interest: Lead banks serve as both arranger and lender. That dual role often results in terms and pricing that protect their interests more than yours. 

• Lack of transparency: Arrangers act as intermediaries, but they also control the message. Borrowers may never hear from other lenders directly and may miss critical market feedback. Additionally, the margin that the lead bank takes is often higher than the borrower expects, meaning that the other banks are not benefiting as much, at the cost of the borrower.  

• Market timing risk: Deal terms are often finalized early in the process. If market conditions shift or the lead bank misjudges the market, you may face a failed syndication or accept a suboptimal structure. 

The outcome is often a deal that feels rushed, overpriced, or misaligned with your true credit profile. 

The Bilateral Advantage: Why More Borrowers Are Re-Engaging Lenders Earlier

Bilateral negotiations are not about rejecting syndication. They are about preparing for it. 

By speaking directly with a broader group of lenders before launching a formal process, borrowers can collect real-time feedback, validate structure, and strengthen their market position. At Redbridge, we guide clients through a two-phased engagement model: 

1. Initial lender outreach: Begin with bilateral discussions across all banks in the syndicate, keeping the desired outcome at top-of-mind, either led internally or by an advisor like Redbridge. Use this phase to gauge lender appetite, understand risk concerns, and uncover potential roadblocks. 
2. Term sheet alignment: Incorporate feedback into a revised structure that reflects current market expectations while keeping control of the deal narrative. 

This strategy gives borrowers a clear view of the market and more leverage going into the syndication. 

Benefits of Early Engagement

• Transparent pricing and competition: Invite multiple banks to respond before pricing is locked in. 

• Fewer surprises later in the process: Address potential covenant or documentation concerns before legal work begins. 

• Lower risk of syndication failure: Secure strong commitments early and build momentum with confidence. 

• Better long-term relationships: Expand your lender base and build credibility with more partners. 

What We’re Hearing from the Market

More companies are starting to recognize the limitations of traditional syndicated loan structures. Across industries, we are seeing treasury teams ask better questions, engage more lenders directly, and rethink the timing of their market outreach. 

Borrowers who take this approach are often surprised by what they uncover. Some realize their current pricing is above market. Others identify structural limitations that were never challenged during the last deal cycle. 

At Redbridge, we are helping clients leverage this shift to take back control of their capital structure before a mandate is issued or a lead bank is appointed. 

Better Deals Start with Better Questions

You don’t have to wait for your bank to set the terms. 

With the right insights and preparation, you can step into your next re-financing discussion with clarity, leverage, and control. Redbridge helps you lead the process, not follow it. And the included banks are informed throughout, at no cost to the borrower. 

Syndication is often the right structure for large or complex financing needs 

Independent bilateral engagement gives your team a strategic advantage. It helps you avoid surprises, uncover hidden risks, and secure terms that actually reflect your company’s creditworthiness. 

Want a Second Opinion on Your Capital Structure?

Redbridge offers a no-cost Debt Scorecard to benchmark your financing and highlight areas where you can reduce pricing, improve flexibility, or optimize your lender group.