Ford Motor Company needs to borrow $50 million.The First National Bank creates a packaged loan with several other banks to lend to Ford Motor Company.This loan package can be sold on the secondary market and carries a rate that is 400 basis points above LIBOR.The First National Bank expects this loan package to ultimately be held by a finance company looking for a good return on their money? What type of loan is this most likely to be?

Question

Quizplus · Accepted Answer

This is most likely a syndicated loan, as it involves several banks pooling their resources to provide a large loan to a single borrower. The fact that it can be sold on the secondary market and carries a rate above LIBOR also supports this conclusion.

Ford Motor Company Needs to Borrow $50 Million