Advertising

Parallel loan

• A process whereby two companies in different countries borrow each other's currency for a specific period of time, and repay the other's currency at an agreed maturity for the purpose of reducing foreign exchange risk. Also referred to as back-to-back loans.

• An example of a parallel loan would be IBM agreeing to lend dollars to a sub of British Petroleum in exchange for the latter lending pounds to an IBM British sub. Such agreements are struck only when exchange controls in one or more countries prevent normal capital flows.

 
 

Follow this link for all the terms related to loan.

 
 Embedded terms in definition
 Borrow
Capital
Currency
Exchange controls
Exchange risk
Exchange
Foreign exchange risk
Foreign exchange
Foreign
Lending
Lend
Maturity
Risk
Time
 
 Related Terms
 

<< Par value stocks Parallel shift in the yield curve >>

Tips for Trying to Fix a Clogged or "Frozen" Home Equity Line: For years, homeowners have turned to home equity lines of credit (HELOCs) as a way to borrow against their home's value to pay for college tuition, home improvements, medical bills and other major expenses. (A home's equity is the market value minus what is owed on the mortgage. If you owe $100,000 on your mortgage but your home is worth $250,000, your equity is $150,000.) More...

Don't stay in bed....unless you can make money in bed. - George Burns

Advertising



Copyright 2009-2018 GVC. All rights reserved.