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 ?
Under the facility, a US$100 million loan will be made available to Access Bank Plc ( Access Bank ), of which US$35 million will be for IFCs own account and the remaining US$65 million will constitute mobilized funding through B loans, parallel loans and/or guarantees.
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 $33m in loans from Barclays, Ecobank, Rand Merchant Bank and Standard Bank.
Two parallel loans of US$ 35 million each from Export Development Canada and Nordic Investment Bank are also part of the financing.
Project Description: The proposed investment entails a syndicated senior loan facility to XacBank, including an IFC A loan of up to US$15 million and IFC B loans or parallel loans of up to US$90 million, in order to promote access to finance in Mongolia and strengthen XacBanks funding position.
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.
Under the facility, a US$150 million loan will be made available to Zenith Bank PLC, of which US$45 million will be for IFC s own account and the remaining US$105 million will constitute mobilized funding through B loans, parallel loans and/or guarantees.
The proposed IFC investment consists of an IFC A Loan of up to US$31 million equivalent, and syndication of parallel loans of up to US$80 million equivalent.
Under the facility, a US$100 million loan will be made available to First City Monument Bank Ltd ( FCMB ), of which US$35 million will be for IFC s own account and the remaining US$65 million will constitute mobilized funding through B loans, parallel loans and/or guarantees.
4 million equivalent in local currency in parallel loans to TP, and 4) provide an interest rate swap with a Loan Equivalent Exposure of up to US$ 5.
3 million in parallel loans from another multilateral or development financial institution.
The financing agreements, which comprise IFC loans of $75 million as well as syndicated and parallel loans of $205 million, aim to bolster BDSN s financial sustainability and reduce Indonesia s reliance on traditional fuel sources.

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