Business Administration - Management FIS403 Chapter Notes - Chapter 8: Eurocurrency, Eurodollar, Commercial Paper
30 Dec 2017
School
Department
Professor
Document Summary
Comparison of commercial paper rate to bank prime rate* An increasing source of funds for canadian firms is the large. Loans from foreign banks denominated in u. s. dollars are. Foreign interest rates may be more favorable. The company called eurodollar loans then converts the borrowed foreign currency to canadian dollars. There is a foreign exchange exposure risk associated with these loans. Pledging accounts receivable as collateral for a loan. An outright sale (factoring) of receivables to a factoring company. Asset-backed securities: sale of receivables by large corporations in public offerings. Tends to be a relatively expensive source of financing. Inventory financing: inventory may be assigned as collateral security against an, for example, in a trust receipt or floor planning operating loan. Loan is based upon serial numbers on product. When goods are sold, loan is repaid. Used by auto dealers, industrial equipment dealers, television and home appliance dealers.
