Back-to-back loan

1. Lending and borrowing - hedging.

A mechanism under which two parties lend each other matching sums on matching terms in different currencies or on a different interest rate basis, with the objective of obtaining a cost advantage or of hedging currency or interest rate risk.

2. Lending and borrowing.

A similar arrangement undertaken for any other purpose.

See also

• Currency risk
• Hedging
• Interest rate risk
• Loan relationship
• Unbacked