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Funding Agreement

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Funding Agreement
A low-risk, fixed-income investment that an institutional investor may purchase. In a funding agreement, one provides a lump sum to the seller, and, in exchange, one receives a fixed return, often based on LIBOR. Mutual funds and pensions often purchase funding agreements because of the certainty associated with them. It is structured much like a guaranteed investment contract.


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At the end of this process, a complicated funding agreement between the contractor and the government is in place.
The rating on the notes is based on a funding agreement issued by Massachusetts Mutual Life Insurance Co.
The three parties have collaborated on the $20 million road construction project under an interim funding agreement reached last summer.
 
 
 
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