Marketing and Participating Internet Agreement

A participation agreement is a contract between all the leaseholders participating together in the joint purchase of their freehold and provides a legal basis for the action.

The new Industry Master Participation Agreement endorsed by BAFT is designed to simplify the exchange of documentation between banks and reduce legal costs by minimizing redundancies and excessive bi-lateral discussions.It is anticipated to become the standard framework agreement for member banks of the EAC.

Participation loans are loans made by multiple lenders to a single borrower.Such senior/subordinated loan participations can be structured either on a LIFO (Last In First Out) or FIFO (First In First Out) basis (see FIFO and LIFO accounting).

Generally, an assignment is the actual sale of the loan, in whole or in part.A participation, on the other hand, means that the original lender maintains ownership over the loan and the participant has only a contract right against the leading participant, not a credit relationship with the borrower.

The terms sub-participation and participation have no strict legal meaning. In the context of finance transactions, it refers to when a lender under a loan agreement sub-contracts all or part of its risk to another financial institution.

In finance, "participation" is an ownership interest in a mortgage or other loan. In particular, loan participation is a cooperation of multiple lenders to issue a loan (known as participation loan) to one borrower. This is usually done in order to reduce individual risks of the lenders.

As defined by the FDIC, a loan participation is an arrangement under which a lender originates a loan to a borrower and then sells a portion of that loan to one or more other financial institutions.

Unlike in a participation loan, each of the lenders in a syndication has a direct contractual relationship with the borrower. In a participation loan, the participant has no direct rights against the borrower, but does not have any direct obligations under the loan agreement (for example, a commitment to lend).