commercial paper

Commercial Paper

An unsecured, short-term loan issued by a corporation, typically for financing accounts receivable and inventories. It is usually issued at a discount reflecting prevailing market interest rates.

Notes:

Maturities on commercial paper rarely range any longer than 270 days.

See also: Accounts Receivable, Bankers' Acceptance (BA), Certificate of Deposit (CD), Interest Rate, Loan, Money Market

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Commercial paper

Short-term unsecured promissory notes issued by a corporation. The maturity of commercial paper is typically less than 270 days; the most common maturity range is 30 to 50 days or less.

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commercial paper

A short-term unsecured promissory note issued by a finance company or a relatively large industrial firm. The notes are generally sold at a discount from face value with maturities ranging from 30 to 270 days. Although the large denominations ($25,000 minimum) of these notes usually keep individual investors out of this market, the notes are popular investments for money market mutual funds. Used interchangeably with the term paper. See also prime paper.