Back-to-back mortgage ( Simple Quick Loan )
Back-to-back mortgage ( Simple Quick Loan ) 
Back-to-back mortgageA Back-to-back loan is really a loan agreement between organizations in two countries
where the currencies remain separate however the maturity dates remain
set. The gross interest rates from the loan are separate too and are
set based on the commercial rates in position when the agreement is actually
signed. ¹
Most back-to-back loans come due within ten years, due to their natural
risks. ¹ Initiated as a means of avoiding currency rules, the practice
had, through the mid-1990s, largely been changed by currency swaps.
1 disadvantage of such contracts is asymmetrical liability -- absent a
specific contract, when one party defaults about the loan, the other celebration
may still be held accountable for repayment. ³ An additional disadvantage in
comparison along with currency swaps is which back-to-back loan transactions tend to be
customarily recorded on financial institutions' records as debts and
thereby increase their own capitalization requirements, while foreign currency swaps
were, during the actual 2000s, widely exempted out of this requirement. ³
References
[1] Tim J. Zamora (1990). Financial institution contingency financing: risks, benefits,
and opportunities. John Wiley & Son's. pp. 74–75. ISBN 978-0-471-60894-3.
[2] Chris Moles, Nicholas Terry (1997). The actual handbook of international
monetary terms. Oxford University Push. p. 32. ISBN 978-0-19-828885-5.
[3] Suk They would. Kim, Seung Hee Ellie (2006). Global corporate financial: text and
cases. Steve Wiley & Sons. pp. 181–182. ISBN 978-1-4051-1990-0.
About Allen Nancy || CV Writing Expert
No comments