Keepwell Agreement


DEFINITION of 'Keepwell Agreement'

A contract between a parent company and its subsidiary to maintain solvency and financial backing throughout the term set in the agreement.

BREAKING DOWN 'Keepwell Agreement'

This is a method by which subsidiary companies may increase the creditworthiness of debt instruments and corporate borrowing.

  1. Bond

    A debt investment in which an investor loans money to an entity ...
  2. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  3. Corporate Finance

    1) The financial activities related to running a corporation. ...
  4. U.S. Savings Bonds

    A U.S. government savings bond that offers a fixed rate of interest ...
  5. Coupon

    The annual interest rate paid on a bond, expressed as a percentage ...
  6. Interest

    The charge for the privilege of borrowing money, typically expressed ...
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