Commercial paper


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Commercial paper

Short-term promissory notes either unsecured or backed by assets such as loans or mortgages 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.

Commercial Paper

An unsecured, short-term debt security issued by a corporation. Commercial paper is usually issued at a discount from par, and is a popular investment with mutual funds. It usually is issued in large denominations (over $250,000) and has a maturity of less than 270 days, with most maturing within one or two months of issue. It is a highly liquid investment and forms part of the money market. It is often simply called paper.

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.

Commercial paper.

To help meet their immediate needs for cash, banks and corporations sometimes issue unsecured, short-term debt instruments known as commercial paper.

Commercial paper usually matures within a year and is an important part of what's known as the money market.

It can be a good place for investors -- institutional investors in particular -- to put their cash temporarily. That's because these investments are liquid and essentially risk-free, since they are typically issued by profitable, long-established, and highly regarded corporations.

References in periodicals archive ?
This notable evolution in Technoloy Media and Telecommunications area in Iraq is a turning-point to enable others the access into Information technology and the use of its application in conducting various activities with regards to writing electronic messages, entering into contracts, transactions, negotiating the commercial papers, trading securities by electronic or software systems or conducting any electronic transaction within this Law.
The commercial paper market is used by commercial banks, nonbank financial institutions, and nonfinancial corporations to obtain short-term external funding.
So far they have only set up the fund for commercial paper buying...
The volume of commercial paper outstanding totals about 17 trillion yen.
The Federal Reserve will provide financing to the SPV under the CPFF and will be secured by all of the assets of the SPV and, in the case of commercial paper that is not asset-backed commercial paper, by the retention of upfront fees paid by the issuers or by other forms of security acceptable to the Federal Reserve in consultation with market participants.
The amount of money the Fed could channel into the short-term commercial paper market could surpass the $700 billion bailout passed by Congress a few days earlier.
The Fed invoked emergency powers to set up the fund, which will buy three-month unsecured and asset-backed commercial paper rated at least A1/P1/F1.
Gannett said it's tapping the commercial paper market despite the near chokehold of the credit markets over the past few weeks.
The amount of commercial paper outstanding is rising, the slope of the yield curve is steepening and energy prices have fallen sharply.
For example, a two-year floating-rate note with three-month interest rate resets may provide 0.05 percent to 0.10 percent more annual yield than a three-month commercial paper from the same issuer.

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