Complementary Financing

Complementary Financing

A type of financing in which different lenders agree to fund under similar yet parallel documentation and a pro rata security package.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Complementary Financing

A loan made by more than one lender that is secured by the same stock or other security. All lenders have a lien on a given security until the loan is paid off. In complementary financing, two or more lenders make two or more loans to a single borrower and secure those loans by a certain security. The amount of the lien on the security is in proportion to the amount of the loan each lender makes. For example, if Lender A loans $60,000 and Lender B loans $40,000 to Borrower C and they both secure their loans with a certain number of shares of Stock D, then, in the event of default, Lender A has the right to 60% of the shares, while Lender B has the right to 40%.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Complementary financing options, such as the taxable America Fast Forward Bonds (AFFBs), combined with traditional taxexempt bonds and federal funding, such as the Transportation Infrastruct ure Finance and Innovation Act (TIFI A), would broaden the U.S.
Salus Capital is a direct originator of secured asset-based loans to the middle market across a variety of industries with additional complementary financing throughout the capital structure.
"But otherwise, in all other instances, we ensure that we are only providing complementary financing alternatives to businesses rather than being predatory in any way."
Developing Asian countries offer investments that could provide complementary financing for major initiatives, especially in the areas of infrastructure and energy.
* A complementary contract destined to complementary financing which contains allocated amounts with special destination.
These grants will also be topped up by complementary financing to the tune of $612.9 million from other sources such as governments of countries participating in projects selected in the fields of biological diversity, biosafety, climate change and international watercourses, the World Bank added.
The Polish Ministry of Environment has, on behalf of the city, applied for a complementary financing for sewerage improvement from the new European Union Instrument of Structural Policies for Pre-Accession programme.
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