Among securitization products on the market, NIF products prevail. The Euronot release program is a long -term obligation of the bank, according to which the borrower can produce short -term securities in its name. Unfilled securities bank is obliged to buy at a minimum price. The bank usually issues short -term deposit certificates. Companies that cover the largest market share, they are often presented in the framework of medium -term credit programs in the form. So, the NIF production is off-balance sheet articles for the bank and at the same time a striking example of securitization, since it replaces traditional banking loans. Approximately the same purpose of products known under the name RUF (medium -term credit program based on EuroNot with banking support), NPF (means for buying a Euro -Not) or means of Euronot themselves.
The ever -increasing share of NIF is a non -guaranteed emission, also known as a program of commercial Eurobumag. Emissions of non -guaranteed securities, when there is no bank for their guaranteed placement, are usually considered a relatively risky source of financing, since it is impossible to expect support for the market, if the issue does not bring the expected results, that is, the bonds will not be sold. The most famous example of this type of securities is the so -called “catchy bonds”, that is, released by companies with high risk. However, they are attractive in that they may be highly profitable. Book bonds were very popular in the 80s.
For borrowers, the main motives for the use of NIF are the low cost compared to traditional banking loans and their significant flexibility. Emission of the Euro -onot, for example, usually costs only to the emission and consists of paying interest on securities and premiums for NIF means that covers the cost of emission and insurance obligations if banks have to buy unsaturated securities at a pre-established minimum price. The main reason for the emission on the NIF program is, of course, the rating of the borrower. In practice, it sometimes happens that the profit is lower than the Libor rate, but much more often the profit is higher than the current market level. The Euronot program is widely used by corporations and financial institutions to increase additional capital, banks also often use it to obtain subordinated capital.
