In a fronting loan arrangement, the intermediary bank extends a risk-free loan to the foreign affiliate.

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In a fronting loan arrangement, the intermediary bank extends a risk-free loan to the foreign affiliate, which is then used to fund the foreign affiliate's operations. The intermediary bank assumes the risk of the loan, while the foreign affiliate benefits from the lower interest rates that are typically available to the intermediary bank.

In a Fronting Loan Arrangement, the Intermediary Bank Extends a Risk-Free