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Cross-Collateralized
Last Updated: Jun 6, 2019
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Cross-Collateralization occurs when the collateral defined in one credit facility is also the collateral of another facility. These facilities may be within one relationship such as collateral supporting a RLOC also collateralizes the term loan and vice versa. They may also be separate borrowers whereas Borrowers A collateral not only supports its loans but that of Borrower B loans.