Associate Director Amanda Pletz and former Senior Consultants Gary Lambert and Dr. Georg Dettmann have published the article “Implicit Support and Its Implications on Guarantee Fee Pricing: Fact or Fiction” in Intertax. The authors review the main issues to be addressed when pricing guarantee transactions. They find that implicit support is a much-discussed issue but that the implications of implicit support are still very much disputed when considering inter-company financial transactions, including guarantee arrangements. The authors suggest that pricing methodologies be carefully selected and corroborated by several approaches or data models.
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