MCC Investment and Leasing also provides bank instruments placing / leasing and sales.
Bank instruments are asset backed notes issued by a bank to an investor which mature over 5-10 years, collecting an annual coupon (“interest”) until it matures at its pre-defined value.
Banks, create paper notes (“IOU’s”) which they sell to investors, guaranteeing a certain annual interest and maturity value. This allows the investor to collect their expected profit, while the bank accesses immediate cash to meet capital requirements for additional financing opportunities.
Unlike bonds, the bank instrument is rather complex, and is typically referred to as a “hybrid note”. Bank instruments: collect high annual interest rates and are backed by top rated banks, and are issued ONLY in amounts of tens of Million EURO. Bbank instruments can be purchased at a discount from face value, and traded to investors in the secondary market.
5 step summary to clarify the details of how bank instruments evolve.
Bank Instrument Steps to Maturation