Parallel Loan

A type of foreign exchange loan agreement that was a precursor to currency swaps. A parallel loan involves two parent companies taking loans from their respective national financial institutions and then lending the resulting funds to the other company's subsidiary.

Investopedia Says:
For example, ABC, a Canadian company, would borrow Canadian dollars from a Canadian bank and XYZ, a French company, would borrow euros from a French bank. Then ABC would lend the Canadian funds to XYZ's Canadian subsidiary and XYZ would lend the euros to ABC's French subsidiary.

The first parallel loans were implemented in the 1970s in the United Kingdom in order to bypass taxes that were imposed to make foreign investments more expensive.

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Four-party loan involving parent companies and their subsidiaries in different countries. A parallel loan is an arrangement to borrow in the currency of one country with a promise to pay interest and principal at a later date. The loan is collateralized by a concurrent loan from a multinational parent company to its affiliate in a foreign country. A parallel loan is similar to a Back-To-Back Loan or two-party loan, in that it transfers surplus liquidity from one currency to another. Its main disadvantage is that the lender's right of offset in event of default is unclear, and it is less flexible than a back-to-back loan. The two-party loan is safer from the lender's view because, if the subsidiary defaults, the multinational parent normally is obligated to make good on the loan.