ACCOMMODATION ENDORSEMENT

Accommodation endorsement is a kind of written agreement that came from one entity with the purpose of backing up the credit liability of another entity. This kind of insurance can be done without much consideration, and it also adds to the credibility of the creditworthiness of the entity insured. Commonly, this is done by a parent company to its subsidiary in order for the latter to borrow using the credit standing of its parent. It is similar to the guarantee given by the government to a third party’s debt.

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