Aval

A guarantee added to a debt obligation by a third party who ensures payment should the issuing person default.

The debt obligation could be a note, bond, promissory note, or draft. The third party providing the aval is usually a bank. Since avals can be forged, caution should be taken when accepting these notes. Banks usually only provide an aval to issuers with very good credit ratings.

The process of avalizing is performed mainly in Europe. In the United States, banks have restrictions as to what instruments may be provided an aval.