Bills of exchange are accepted (by a bank, for afee) so as to enhance the bill’s credit standing (reduce its risk) because boththe issuer and acceptor are promising to redeem the security. Some of the majorbanks are the main acceptors and as ‘prime’ banks, their BABs trade at a commonyield. Promissory notes are not guaranteed or acceptedby a third party. Issuers are very creditworthy and include the Treasury(T-notes), highest-grade companies (CP) and banks (NCDs). Yields for promissorynotes will vary between issuers to reflect differences in credit risk and intheir liquidity
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