A loan arrangement in which a parent company reduces its political risk by using an intermediary bank rather than a direct transfer of funds to a subsidiary is called a (an)

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A fronting loan is a loan arrangement in which a parent company reduces its political risk by using an intermediary bank rather than a direct transfer of funds to a subsidiary. This is a common strategy used to minimize political risks when investing in foreign countries. A parallel loan involves two loans being taken out by two different companies in different countries, with each loan being denominated in the currency of the other country. Eximbank direct loans are loans provided by the Export-Import Bank of the United States to foreign buyers of US goods and services. The answer does not depend on the host country.

A Loan Arrangement in Which a Parent Company Reduces Its