Back-to-Back Commitment

What is ‘Back-to-Back Commitment’

A commitment to make a second take-out loan that piggybacks another loan. With a back-to-back commitment, once the terms of the first loan are satisfied, it will be rolled into the second loan.

Explaining ‘Back-to-Back Commitment’

The best example of a back-to-back commitment is when a bank makes a construction loan to build a house. Once the house has been built and a certificate of occupancy issued, the bank will make a new loan, probably a first mortgage loan, to take out the construction loan. The bank’s commitment will specify the conditions that must be met in order for the commitment to fund the second loan to be valid.

Further Reading

  • Inter-day return behaviour for stocks quoted 'back-to-back'in Hong Kong and London – [PDF]
  • The emerging patterns of power in corporate governance–back to the future in improving corporate decision making – [PDF]
  • Status of Gulf co-operation council (GCC) electricity grid system interconnection – [PDF]
  • 'Everything has a fucking value': Negative Dialectics in the Work of Back to Back Theatre – [PDF]
  • AC vs. HVDC Back to Back Interconnection cost benefit analysis – [PDF]
  • Capital flight from sub‐Saharan Africa: linkages with external borrowing and policy options – [PDF]
  • Financial Crisis Fatigue? Politics behind Japan's Post-Global Financial Crisis Economic Contraction – [PDF]
  • Regional economic trends – [PDF]