Investment dictionary

BACKTOBACK LOAN

Back-to-Back Loan: translation

A loan in which two companies in different countries borrow offsetting amounts from one another in each other's currency. The purpose of this transaction is to hedge against currency fluctuations. With the advent of currency swaps this type of transaction is no longer used very often.

In a back-to-back loan, a U.S. company would loan US$1000 to a U.K. company in the U.S., and the U.K. company would loan an equivalent amount (at spot exchange rates) in sterling to the U.S. firm in the U.K. Both companies get the currency needed without going to the forex market.

  1. backtoback loan—Backtoback loan translation A loan in which two companies in separate countries borrow each others currency for a specific time period and repay the others currency at an...Financial and business terms
  2. backtoback loan—backtoback loan translation A loan in which two companies in separate countries borrow each others currency for a specific time period and repay the others currency at an...Financial and business terms
  3. backtoback loan—банк. фин. компенсационный [параллельный\] кредит взаимное кредитование двух компаний в различных странах в местной валюте каждой из стран на определенное время и погашен...Англо-русский экономический словарь
  4. backtoback loan—Кредит предоставляемый одной компанией другой компании обе компании в разных странах часто в различной валюте с использованием банка или иного финансового института в кач...Финансы - оксфордский толковый словарь