back-to-back loan

(redirected from Parallel Loans)

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.

Back-to-Back Loan

A situation in which two companies in different countries borrow an equivalent amount from each other in their respective currencies. That is, there is no net capital output because the companies are borrowing the same amount, only in different currencies. The companies repay these loans in an agreed-upon period of time. This used to be a common way to hedge against currency fluctuations, though currency swaps have largely replaced them.

back-to-back loan

or

parallel loan

an arrangement under which two companies in different countries borrow each other's currency and agree to repay the loans at a specified future date. At the expiry date of the loans each company receives the full amount of its loan in its domestic currency without risk of losses from exchange-rate changes. In this way back-to-back loans serve to minimize EXCHANGE RATE EXPOSURE.

back-to-back loan

or

parallel loan

an arrangement under which two companies in different countries borrow each other's currency and agree to repay the loans at a specified future date. At the expiry date of the loans, each company receives the full amount of its loan in its domestic currency without risk of losses from exchange-rate changes. In this way back-to-back loans serve to minimize EXCHANGE-RATE EXPOSURE.
References in periodicals archive ?
Proparco and ABSA Bank Ltd (as arranger) provided parallel loans.
The EBRD loan is provided alongside parallel loans from the German Investment Corporation (DEG) and the Arab Bank, of $16 million each.
The bank also co-financed Cambodia with other international development partners including the Cambodian government itself which came in the form of official loans and grants, other concessional financing, and commercial financing such as B loans, risk transfer arrangements, parallel loans and equity, guarantee co- financing, and co-financing for transactions under ADB's TFP.
The Vodafone Ghana deal includes an $82m syndicated loan, as well as parallel loans from the Export-Import Bank of China, China Development Bank and the Deutsche Investitionsund Entwicklungsgesellschaft of Germany as well as $33m in loans from Barclays, Ecobank, Rand Merchant Bank and Standard Bank.
The total value of the project is around 500 million, with the EBRD and the EIB each providing 200 million under parallel loans.
Six of these will be addressed here: floating-rate notes, Eurobonds, the early stages of the junk bond market, mortgage pass-through securities, parallel loans, and financial futures contracts.
Two parallel loans of US$ 35 million each from Export Development Canada and Nordic Investment Bank are also part of the financing.
5 billion in parallel loans for clientsnearly half of which has come from MCA signatories.
Two parallel loans totalling US$45 million are being funded with the same terms and conditions as the EBRD nine- year tranche from the Canadian Export Development Corporation and the Nordic Investment Bank.
The EBRD loan will be accompanied by parallel loans of US$ 50 million from Proparco (Societe de Promotion et de Participation pour la Coopration Economique S.
The IIC loan will comprise an A loan and a B loan for a total of up to US$75 million, along with parallel loans, if necessary.

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