Investments in Money Market
Investments in Money Market
A document signed by the borrower unconditionally promising to repay a loan under agreed-upon terms. Interests may be produced.
Counterpart risk for the investor: Depending on the soundness of the issuing company, as there is no specific guarantee. The investor may know the risk grade according to the rating received by security rating companies.
Term: Between 1 and 10 years.
Return on Investment and Interests: The companies are the ones who determine the interest rate to be paid for each case. Generally these interests will be paid every 28 days.
Marketability: Low
Possible buyers: Individuals or companies, national or foreign, and institutional investors (only if allowed by the legal regime that they are constituted under.
Liquidity: Medium, through an over-the-counter market.
Legal Regime: 50 interest rate basis points for those securities issued after 2003.
It is a short-term debt security issued by a company as part of a commercial transaction and payment is guaranteed by the issuer’s bank.
Counterparty risk for the investor: These have the guarantee provided by the commercial banking institution.
Term: From 7 until 182 days.
Return on Investment and Interests: These are settled upon maturity.
Marketability: Medium.
Possible buyers: Individuals or companies, national or foreign, and institutional investors (only if allowed by the legal regime that they are constituted under).
Liquidity: Medium.
Legal Regime: 50 interest rate basis points for those securities issued after 2003.
These are bearer securities issued by long-term multiple banking institutions in order to obtain resources by means of which they obtain financing.
Risk for the investor: These are guaranteed by the bank institution that issues them. The investor may know the risk grade according to the rating received by security rating companies.
Term: Between 3 and 10 years.
Counterpart risk for the investor: The companies are the ones who determine the interest rate to be paid for each case. Generally these interests will be paid every 182 days. Furthermore, since the price varies in an over-the-counter market, capital gains may be obtained.
Marketability: Broad
Possible buyers: Individuals or companies, national or foreign, and institutional investors (only if allowed by the legal regime that they are constituted under)
Liquidity: Medium
Legal Regime: 50 interest rate basis points for those securities issued after 2003.
These are instruments that guarantee the deposit of a determined amount of money in a banking institution and provide the holder the right to perceive interest payments, as well as the deposited amount upon maturity.
Counterpart risk for the investor: These are instruments that are guaranteed by the issuing credit institution (bank).
Term: Determined by the banking institutions.
Return on Investment and Interests: The issuing bank determines the interest rate payable for the different terms.
Marketability: Low
Possible buyers: Individuals or companies, national or foreign, and institutional investors (only if allowed by the legal regime that they are constituted under).
Liquidity: Medium, through an over-the-counter market.
Legal Regime: 50 interest rate base points for those securities issued after 2003.