parallel loan definition

parallel loan

Four-party arrangement in which a parent firm finances a subsidiary firm in another country, without a cross-border transfer of funds. An Indian firm, for example, borrows dollars to finance its US subsidiary and lends the equivalent amount in rupees to the Indian subsidiary of a US firm. In both cases, the parent firms remain liable for loans made to their subsidiaries. A parallel loan is a type of swap. See also back to back loan.

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