Backup Line of Credit

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Backup Line of Credit

A bank assurance of funds obtained by an issuer of commercial paper to protect the CP investor from default. The issuer pays a commitment fee to the bank.

Backup Line of Credit

A bank's guarantee of an issuer's commercial paper. Commercial paper is a short-term, unsecured debt security usually issued by a company with a very high credit rating. As a result, commercial paper is very low-risk. The backup line provides additional security for the paper, but usually does not provide credit for the full value of the paper. The issuer pays a fee to the bank for the backup line.
References in periodicals archive ?
13b of PRPDTDDUK in the following lots LOT I: Providing financial services to the SE Bulgarian Loto third backup credit institution (bank) Lot II: Providing financial services to the SE Bulgarian sports lottery for the fourth backup credit institution (bank)
programme on May 17, without requesting backup credit from its international lenders.
Dublin opted to make a clean break from the 85 billion euro bailout last week but noting the fragile external environment, the council said a backup credit line would have provided valuable added protection against any fresh funding pressures.
Bank lines of credit are commonly used by business customers for backup credit.
By combining early due diligence with close attention to aging receivables and using strategies like keeping backup credit card numbers on file, small-business owners can get a handle on their account receivables and keep their bottom lines healthy, even when customers are dealing with their own economic challenges.
As a result, companies are consolidating all of their business in one or two banks, are working with their bankers to make the arrangement profitable and are searching for backup credit sources in case the bank says "adios.
With the closing of our backup credit facility and the refinancing activity to date, we have successfully competed a significant portion of our 2003 financing plan," said Thomas A.
Barclays emerged as one of the top banks involved in a pounds 138 million backup credit line for the firm arranged by Chicago-based Bank One in October.
In Pakistan this purpose is served by a pretty well managed system of commercial and investment banks, DFIs, Leasing Companies, Modarabas and Mutual Funds which are all vital parts of the financial framework for several reasons like their involvement, particularly that of the banks with the day to day operations of the country's payments and settlements and as providers of a backup credit line.
The A/R program extends through October 2016, subject to annual renewal of backup credit lines.
Lot II: "Providing financial services to the SE" Bulgarian Loto first backup credit institution (bank).
The market turmoil caused many lenders to back away from markets, putting a strain on banks, which had established backup credit arrangements with the stranded borrowers.