Primary navigation:

QFINANCE Quick Links
QFINANCE Reference
Add the QFINANCE search widget to your website

Home > QFINANCE Dictionary > Definition of back-to-back loan

Definition of

back-to-back loan


arrangement for two matching loans in different currencies an arrangement in which two companies in different countries borrow offsetting amounts in each other's currency and each repays their loan at a specific future date in its domestic currency. Such a loan, often between a company and its foreign subsidiary, eliminates the risk of loss from fluctuations in exchange rates.

Recommended Further Reading (Term count)
  • To Hedge or Not to Hedge
    by Steve Robinson
    Business has become increasingly international, and companies cannot ignore the impact of currency changes on cash flows, profitability, and their asset and liability position. No company is wholly immune—the cash received from exporting is affected by the relationship between the currency used by the customer to pay and the currency in which the cost of providing the product or service is denominated.Many commodity prices have been volatile,...

Definitions of ’back-to-back loan’ and meaning of ’back-to-back loan’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’back-to-back loan’ and other financial terms with our online QFINANCE Financial Dictionary.

Back to top