Definition for : Sub-participation

A bank or group of banks can decide to Transfer part of the risks they hold in the context of a financial transaction with a counterparty. To that effect, they can sub-participe to other bank(-s) via a "sub-participation agreement" which can be either disclosed or silent. The sub-participation can be either a "funded sub-participation" (where the Participant refinances the primary bank), or an "unfunded sub-participation" (where it does not).

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