Finance Deals & Syndicated Lending · glossary
The benefit a company must get from a deal before its directors approve it. A subsidiary guaranteeing its parent's loan needs a reason, such as use of the group's revolver, and the board minute must show the directors considered it. Chapter 13
Explained in Chapter 13, Guarantees and Security: a Primer, of Finance Deals & Syndicated Lending.
The main page for this term is Corporate benefit, in Security & Collateral.
That reason is the subsidiary's corporate benefit. Here it is indirect but real. The subsidiary can use the Group's revolver for working capital, and it shares in the strength of the combined group.Read Chapter 13, Guarantees and Security: a Primer →
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