Counterfactual interest rates and group guarantees

financial services

In the context of the prosecution of the CFO of a major multinational telecommunications equipment company charged with wire fraud and bank fraud in a federal criminal case, we assisted counsel concerning the terms of loans conceded to a subsidiary.

This exercise involved analyzing the interest rates charged on such loans and then estimating the counterfactual credit quality, credit ratings, and interest rates in the context of explicit and implicit guarantees.

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