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Bankers' Acceptances

Bankers' Acceptances* are drafts drawn by a commercial firm upon a bank and "accepted" by the bank. The drafts instruct the bank to pay a designated party a certain sum of money at a specified time in the future. The bank's "acceptance" means that the bank is guaranteeing the availability of the funds at the maturity of the Acceptance.

Terms and Structures

• Maturity
  Generally 30 to 180 days
• Issued
  Offered on a continuing basis and readily marketable; maturities contingent on supply
• Form
  Securities can either be maintained in Wachovia’s Institutional Trust Services Custody Department, or with another custody agent
• Quoted
  On a discount yield basis
• Rate Structure
  Yields vary according to money market conditions, maturities, and size of Acceptance
• Interest
  Acceptances are discounted at purchase and the return to the investor is the difference between the purchase price and face (par) value of the Acceptance
• Denominations
  Typically $1,000,000
• Security
  Acceptances carry the irrevocable credit of the accepting bank to make payment at maturity
• Tax Status
  Fully taxable on the federal and state level

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