Note issuance facility (NIF) is an

underwriting Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liability ...

agreement/arrangement in the

Eurocurrency Eurocurrency is currency held on deposit outside its home market, i.e., held in banks located outside of the country which issues the currency. For example, a deposit of US dollars held in a bank in London, would be considered eurocurrency, as the ...

market under which borrowers place short/medium term (one to six months) notes via a

syndicate A syndicate is a self-organizing group of individuals, companies, corporations or entities formed to transact some specific business, to pursue or promote a shared interest. Etymology The word ''syndicate'' comes from the French word ''syndic ...

of prime/

commercial bank A commercial bank is a financial institution that accepts deposits from the public and gives loans for the purposes of consumption and investment to make a profit. It can also refer to a bank or a division of a larger bank that deals with whol ...

s, and the borrowers' issue is backed by the commitment of the syndicate banks to purchase any paper which the borrowers may be unable to sell.Reserve Bank of India http://rbidocs.rbi.org.in/rdocs/content/pdfs/87359.pdf Since the facility/guarantee itself is contingent, the creation of NIF does not give rise to an entry in the

financial account In macroeconomics and international finance, the capital account, also known as the capital and financial account, records the net flow of investment into an economy. It is one of the two primary components of the balance of payments, the other b ...

and will be treated as an off-

balance sheet In financial accounting, a balance sheet (also known as statement of financial position or statement of financial condition) is a summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a business ...

item in the guarantor books. When the underwriting institution is requested to make funds available, it will acquire the actual asset (notes) and will be recorded in the financial account.

References

Legal documents Negotiable instrument law Securities (finance) Interest-bearing instruments {{Europe-law-stub