Sub-participation: Difference between revisions
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An arrangement between two banks whereby in return for the sub-participant bank depositing with the lending bank the principal amount of a loan made by the latter, the lending bank will pass to the sub-participant bank its relevant share of any payments received from the borrower. | An arrangement between two banks whereby in return for the sub-participant bank depositing with the lending bank the principal amount of a [[loan]] made by the latter, the lending bank will pass to the sub-participant bank its relevant share of any payments received from the borrower. | ||
As a legal matter sub-participation is solely between the lending and sub-participant banks, giving the latter no contractual link with the borrower. | As a legal matter sub-participation is solely between the lending and sub-participant banks, giving the latter no contractual link with the borrower. | ||
[[Category:Bank_Lending]] | |||
Revision as of 16:25, 8 November 2013
An arrangement between two banks whereby in return for the sub-participant bank depositing with the lending bank the principal amount of a loan made by the latter, the lending bank will pass to the sub-participant bank its relevant share of any payments received from the borrower.
As a legal matter sub-participation is solely between the lending and sub-participant banks, giving the latter no contractual link with the borrower.
