Corporate Promissory Notes (Continue....1)

Corporate Promissory Notes (CPN's) - Issued by Major Corporations, usually public listed and underwritten by a Bank or Underwriter. This can be any foreign bank, or a Central Bank from country of origin.

Convert to Cash like handling a BG or raise a Credit Line.

Value conversion depends on many factors, some fixed, some floating such as…

Type of Promissory Note (time, maturity date, ownership, value, etc.)

Issuing Corporate Rating (preferably a Dunn and Bradstreet or similar Credit Rating)

Underwriting or Guarantor Bank and their Rating (Central Bank of a Government, Local in
Country Bank, Foreign Worldwide Bank, etc.)

Agent, Underwriter, Security House, or Bank Holding Promissory Note

What type of ‘Currency’, US Dollars is always preferred, but most others are acceptable

Market Conditions

Bank Policy or Underwriter Policy

Politics

Ownership, and Type of Restrictions, if any

Currency Fluctuation, if not already in US dollars

Client Anticipation of Return

Place Transaction Occurs

What is done with ‘Cash’ after conversion - this is becoming a paramount issue with banks or security houses converting the instrument, the preferred and acceptable method is to deposit a portion of the redeemed funds with the honoring bank or security house, usually as follows...


(1) For a 'Bank' not less than 50% for a period of not less than six (6) months.
(2) For a 'Security Trading House' not less than 30% either reinvested in other
types of asset portfolio management (stocks, bonds, mutual funds, etc.)
or in their money market fund.