Escrow
Published by slang July 17th, 2007 in Glossary of Treasury TermsAnother common term used in debt financing is the “escrow”. Here it relates to cash, securities or other valuable instruments that are held by a third party to ensure that the obligations under a contract are discharged. By doing so, the third party’s risk is being mitigated. This is commonly used in infrastructure projects like road,power,etc where an escrow account can be set up at a bank for depositing the payments.
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