Rollover credit

On the Euromarket – loans in very large amounts with a minimum sum of usually EUR 0.5 million, – with a term (period: time to run; time limit) of up to seven years and – with a special interest rate agreement; this is usually based on EURIBOR or LIBOR as the interest rate, – but not fixed for the entire term, but – adjusted to the respective market conditions at contractually agreed intervals. This arrangement is favorable for the debtor when interest rates fall, but unfavorable when interest rates rise. The risk of rising interest rates must therefore be limited by appropriate hedging. – See hedge, cap, hedge transaction, reference interest rate, reverse floater, debt instrument, floating rate, interest rate option, interest rate risk.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
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https://www.gerhardmerk.de/