TRANSFER-PRICING5 MIN READ
Delineate the loan before pricing the rate
Choose a defensible first move for pricing an intra-group loan.
IndiaCo receives a $60M five-year USD loan from the parent. Treasury wants to book 9 percent using a generic single-B bond screen. IndiaCo has stable cash flows, no external debt, and could likely obtain bank financing with parent comfort. The loan agreement has no security and light covenants.
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