Financing arranged by one or multiple financing parties (usually banks) acting as Arranger(s), who will look to distribute all or a part of this financing to a syndicate of lenders.
Unlike the case of Underwritten Financing, in Best Efforts transactions, the arrangers do not commit to provide the debt to the issuer, taking no market or distribution risk. In case the full amount of the financing cannot be placed with a syndicate of lenders, then the borrower has the option to reduce the amount of the total debt financing or to not proceed with the transaction.
This financing is typical for refinancings, repricings or recapitalizations, but can also be done for M&A transactions in cases where there is a high degree of confidence that the debt will be placed.
See also: Underwritten Financing