What is 'Keepwell Agreement'

A contract between a parent company and its subsidiary to maintain solvency and financial backing throughout the term set in the agreement.

Explaining 'Keepwell Agreement'

This is a method by which subsidiary companies may increase the creditworthiness of debt instruments and corporate borrowing.

Further Reading

What does the public know about economic policy, and how does it know it?
www.nber.org [PDF]
KICK-OUT OPTION See REVERSE KNOCK-OUT OPTION. KICKER [COL] An EQUITY stake offered by a company to a BANK providing LOAN funding or an INVESTOR supplying CAPITAL through a NOTE or BOND. Although the compensation can take different forms, in …

Financial Transactions in Today's World: Observations from a Transfer Pricing Perspective
heinonline.org [PDF]
KICK-OUT OPTION See REVERSE KNOCK-OUT OPTION. KICKER [COL] An EQUITY stake offered by a company to a BANK providing LOAN funding or an INVESTOR supplying CAPITAL through a NOTE or BOND. Although the compensation can take different forms, in …

Financial Keep-Well Agreements: When Comfort Becomes Discomfort
heinonline.org [PDF]
KICK-OUT OPTION See REVERSE KNOCK-OUT OPTION. KICKER [COL] An EQUITY stake offered by a company to a BANK providing LOAN funding or an INVESTOR supplying CAPITAL through a NOTE or BOND. Although the compensation can take different forms, in …