Investor Glossary-keepwell agreementInvestor Glossary-keepwell agreementInvestor Glossary-keepwell agreementInvestor Glossary-keepwell agreementInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Keepwell Agreement

The HTML to link to this page
 

A keepwell agreement is a contract between a parent company and one of its subsidiaries which guarantees that the parent company will provide all necessary financing to the subsidiary for a pre-determined period of time. The idea behind a keepwell agreement is to make the subsidiary company appear more creditworthy in the eyes of banks and other lenders. Without a keepwell agreement a small subsidiary might have trouble securing additional financing. Since the keepwell agreement acts as a financial guarantee, obligating the parent company to provide consistent funding, banks and other financial institutions feel more confident making loans with a keepwell agreement in place. Likewise, due to the financial obligation placed on the parent company by a keepwell agreement, the subsidiary company may enjoy a better credit rating than would be possible without a signed keepwell agreement.



Rate this Keepwell Agreement definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: irrevocable trust, minority interest, Zero Cost Collar, 144a, open position, EBITDA, 1035 exchange, annual return, FICO score, phantom income, in escrow, diluted share, deferred revenue, real GDP, deferred tax, current ratio, FTSE, 1031 exchange, dividends payable, margin rate, stock market close, limit order, VIX, retained earnings, per diem, debt service coverage, class C shares, stock split, average price per share, ex-dividend, command economy, ex-dividend date, reverse mortgage, liquidity ratio, option premium, risk management, quality assurance, 401a, required rate of return, cancelled check, implied volatility, covered put, LIBOR, Key Rate Duration, labor relations, wholly-owned subsidiary, APR, balance sheet, inflation


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use