Printer Friendly
The Free Dictionary
982,803,500 visitors served.
?
Dictionary/
thesaurus
Medical
dictionary
Legal
dictionary
Financial
dictionary
Acronyms
 
Idioms
Encyclopedia
Wikipedia
encyclopedia
?

Back-to-Back Loan

    0.04 sec.
Back-to-Back Loan
A loan in which two companies in different countries borrow offsetting amounts from one another in each other's currency. The purpose of this transaction is to hedge against currency fluctuations. With the advent of currency swaps this type of transaction is no longer used very often.

Notes:
In a back-to-back loan, a U.S. company would loan US$1000 to a U.K. company in the U.S., and the U.K. company would loan an equivalent amount (at spot exchange rates) in sterling to the U.S. firm in the U.K. Both companies get the currency needed without going to the forex market.

Back-to-back loan
A loan in which two companies in separate countries borrow each other's currency for a specific time period and repay the other's currency at an agreed-upon maturity.
?Page tools
Printer friendly
Cite / link
Email
Feedback
Add definition
? Mentioned in ? References in periodicals archive
No references found
 
The earlier decisions were very taxpayer-favorable, indicating that the Tax Court had changed its attitude on back-to-back loan restructuring between related entities.
S shareholder loan basis by Schwartzman, Randy / The Tax Adviser
Arrangements the IRS can recharacterize include debt guarantees and equity investments as well as back-to-back loans.
Conduit financing arrangements by Alek, Elizabeth / Journal of Accountancy
Moreover, the regulations establish a presumption (which can be rebutted by the taxpayer only by "clear and convincing" evidence) that the intermediate party would not have participated without the back-to-back loan from the financing entity if the financing entity also guarantees the liability of the borrower to the intermediate party.
The conduit regulations: a primer by Thompson, Mitchell S. / Tax Executive
More results
 
Financial browser? ? Full browser
 
 
Financial Dictionary
?

Disclaimer | Privacy policy | Feedback | Copyright © 2008 Farlex, Inc.
All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. Terms of Use.