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Dictionary

Banker's Acceptance

From the Collaborative Bond and Money Market Data Portal

 

In the Collaborative Bond and Money Market Data Model the Banker’s Acceptance is treated as the same as Commercial Paper in the Security Type field although this can be differentiated in the notes field.

Definition: A Banker’s Acceptance is a short-term debt instrument issued by a corporation that is secured by a bank.

In other words, they are essentially Commercial Paper that is secured by a bank in the event of non-payment.

In general, these instruments are sold at a discount and mature at face value. They can be sold in the secondary markets prior to maturity and are generally quite sought after due to the reduced risk afforded by their secured nature.

Banker’s Acceptances have maturities of less than 6 months and are usually issued to help a firm trade goods across borders as they can alleviate issues that arise when the creditworthiness of a foreign entity is unknown.

For information on the size of the Commercial Paper Market, please use CMDportal's data sheet tool.
For information on the composition of the Commercial Paper Market, please use CMDportal's issuer search tool.
For information on active dealers in the Commercial Paper Market, please use CMDportal's dealer search tool.
For information on active investors in the Commercial Paper Market, please use CMDportal's investor search tool.