The role of the administrative agent is to perform administrative tasks on behalf of the lenders. An administrative task is one which does not involve making commercial decisions. An example is receiving communications from the borrower, or the borrower’s broker, or lawyer and relaying them to the lenders, with or without suggestions.

An administrative agent has no discretion to make commercial decisions. If they do then, by definition, they are not an administrative agent. For example an administrative agent cannot decide whether to pay a drawdown request on a construction facility. However, the administrative agent can perform due diligence on the drawdown request and recommend commercial decisions to the lenders and then carry them out once they are approved.