The leverage in which the so-called non-recourse borrowing is used. It is not backed by collateral posted by the borrower. The lender (provider of leverage) will not be able to collect from (i.e., have recourse to) the borrower (user of leverage) and/or borrower’s assets in the event of default. An example of non-recourse leverage is structural leverage where the borrowed funds are only secured by collateral and the lender has no claim on the other assets of the borrower.

Non-recourse leverage is non-mark-to-market type of arrangement.