What is a commercial draft drawn by a borrower called, which matures at its face value?

A commercial draft drawn by a borrower that matures at its face value is known as a Bankers Acceptance. This financial instrument is a time draft that is guaranteed by a bank, essentially acting as a promise for payment at a specified time in the future. The borrowers can present their commercial drafts to the bank, which, upon acceptance, commits to pay the specified amount at maturity. By doing this, the bank enhances the credit quality of the borrower, allowing them to negotiate better financing terms due to the perceived lower risk associated with bank guarantees.

Bankers Acceptances are typically used in the context of international trade and other transactions that require deferred payments, which adds to their utility in commercial financing. They are often discount instruments, meaning they are sold at a price lower than their face value, with the difference representing the interest earned by the purchaser.

Other options do not fit this definition: Commercial Paper represents short-term unsecured promissory notes issued by corporations, Preferred Shares are a type of equity with specific rights and privileges but do not represent a commercial draft, and Perpetual Preferred Shares are a form of equity with no maturity date, thus lacking the characteristics of a draft.