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 ?
Whether bonds, notes and short-term paper should be classified as fixed-rate loans is debatable, but the majority of these loans are usually extended with a fixed coupon rate.
Short-term paper has spent another week largely unmoved.
Experts highlight NIMs also include income from investments, where banks have moved towards short-term papers during 2017, offering lower yields than long-term bonds.
The rise in yields, however, has a limited impact upon schemes that invest in short-term papers.
Portugal and Greece have continued to go to the market to sell short-term papers during their bailout programmes.
The auction for Market Treasury Bills gathered over Rs 738 billion bids, mostly for short-term papers.
The rate would be aligned with other short-term papers issued by NBAD, such as Euro-CP or London CD.
The European Financial Stability Facility (EFSF) has sold just under 2 billion worth of three-month bonds in its first ever auction of short-term papers ever in a bid to raise extra cash to fund its bond buying and new lending programmes.
Also, looking at the present fluctuations of interest rates, which hardly provide any clarity on the long term outlook, it is safer to park your investments in short-term papers.
structured in tranches of short-term papers of $500 million each.

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