A loan made to finance a merger and acquisition that usually results in a high leverage ratio for the borrower is a

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A highly leveraged transaction loan (HLTL) is a loan made to finance a merger and acquisition that usually results in a high leverage ratio for the borrower. The borrower may use the borrowed money to buy another business, and the new company will pledge assets and cash flows to secure the HLTL. In this way, the lender relies on the success of the merger or acquisition to be repaid.  The other options, such as a loan sold without recourse or with recourse, refer to the terms of how the loan is sold, not the purpose or structure of the loan itself. Loan assignment transaction refers to the transfer of loan ownership from one party to another, but does not relate to the structure of the loan itself.

A Loan Made to Finance a Merger and Acquisition That