Inside Washington

Commonly Used Terms

(Italicized terms are also defined in this section)

A/B loan: Syndicated loan where commercial banks and other investors provide their own funds and take commercial risk, while a multilateral development bank (MDB) remains the lender of record. B lenders benefit from implicit political risk insurance as host governments are less likely to expropriate or limit the foreign currency available to an MDB-supported project. The borrower benefits from the capital raising efforts of the MDB and from lack of withholding taxes on the entire facility.

acquisition financing: Funds obtained for buying existing companies or projects, as opposed to greenfield financing. Traditionally government agencies have only provided acquisition ...