25-40 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 loan made to finance a merger and acquisition that results in a high leverage ratio for the borrower is known as a highly leveraged transaction loan (HLTL). This type of loan is generally for larger amounts and carries a higher risk due to the high leverage ratio. The borrower is likely to have a lower credit rating than for other types of loans, and the lender will usually charge a higher interest rate to compensate for the increased risk.

25-40 a Loan Made to Finance a Merger and Acquisition