What is BACK-TO-BACK LOAN?

(1) A pair of local currency LOANS between two companies, documented under a single agreement providing for the right of OFFSET, which allows the companies to onlend the local currency funds to their own subsidiaries and eliminates the need for the subsidiaries to source their own local financing. (2) A loan commitment from a BANK to a real estate developer that includes a construction loan for initial building and a permanent MORTGAGE loan for ongoing financing once the project has been developed. (1) See also PARALLEL LOAN.

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