back to back loan definition

back to back loan

Two party arrangement in which a bank advances a loan on the basis of a loan advanced by another bank in another country, usually to circumvent foreign exchange restrictions. Such arrangements typically involve parent and subsidiary firms where parent remains liable for repayment in case the subsidiary defaults. See also parallel loan.

back to back loan is in the Banking, Commerce & Finance and International Trade & Relations subjects.

back to back loan appears in the definition of the following term: parallel loan

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