As Von Melnik and Plaut (1991) found, the main borrowers in the Euronote market were OECD banks and governments. After 1983, issuing techniques quickly gained popularity, notably as a low-cost substitute for union credits. Quality borrowers entered the market and became the main borrowers. Borrowers increased from 40% of the market on average in 1983 to more than 70% in 1990. On the lending side, the IVF insurance function has been largely exercised by international commercial banks, but these banks hold only limited amounts of paper. According to various estimates, non-bank investors purchased about 30% of the bonds issued in 1985. In 1992, non-banks held between 60 and 75%. The main non-bank investors are money funds, businesses, insurance companies and wealthy individuals. For these investors, euro notes offer an alternative to bank deposits. The IVF process includes the support of a banking consortium. In accordance with the terms of the IVF, banks agree to purchase a certain amount of a company`s note issuance if it is unable to find independent buyers.

There are several variations of the commodity. Ten years ago, banks introduced nifs with an issuer margin in which the issuer determines the margin (spread over LIBOR) at which bonds are offered. Notes that are not used (within the issuer`s specified margin) are allocated to insurers at a pre-defined rate. During the same period, the multi-component facility (MCF) was introduced as another important development in the euro banknote market. This type of facility allows the borrower to draw funds in several currencies or in different forms, including short-term advances, swingline credits, etc. The borrower will benefit from greater flexibility by choosing the maturity, the credit method and the interest base of his utilization rate. Suppose you are the owner of XYZ Corporation. Based in the United States, XyZ intends to expand its activities in Europe. To support this expansion, you decide to sell XYZ credits to European investors. A bond issuance facility (IVF) is a credit agreement that is usually provided by a consortium of commercial banks.

Its structure can be used for all types of businesses as a vehicle to support the issuance of credits. It is most often used by companies wishing to raise capital in European markets. While in the early 1980s most IVFs contained some form of enforcement service, more recently, an increasing number of IVFs were agreed, in whole or in part, without any insurance obligation. Unsigned IVF increased from about 33% in 1985 to 70% in 1992.