Implicit Support and Its Implications on Guarantee Fee Pricing: Fact or Fiction

01 December 2019
Amanda Pletz, Gary Lambert, Dr. Georg Dettmann

Associate Director Amanda Pletz and 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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