accommodation endorser
Definition
A person or institution that co-signs a loan or bill as a guarantor, becoming secondarily liable if the borrower defaults.
Example
Example 1:
Dangote Group endorses a bank loan taken by one of its smaller subsidiaries, if the subsidiary defaults, Dangote Group as the accommodation endorser is legally obligated to step in and repay the debt.
Example 2:
JPMorgan endorses a smaller regional bank’s acceptance note, boosting its credibility enough to be traded on the secondary market, JPMorgan becomes the accommodation endorser, liable if the smaller bank fails to honor the note.