This article is about the type of security used on financial markets. For the term as used in the Uniform Commercial Code and in other legal contexts, see Negotiable instrument.
This article's factual accuracy may be compromised due to out-of-date information. Please help update this article to reflect recent events or newly available information.(May 2015)
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Commercial paper, in the global financial market, is an unsecured promissory note with a fixed maturity of usually less than 270 days. In layperson terms, it is like an "IOU" but can be bought and sold because its buyers and sellers have some degree of confidence that it can be successfully redeemed later for cash, based on their assessment of the creditworthiness of the issuing company.
Commercial paper is a money-market security issued by large corporations to obtain funds to meet short-term debt obligations (for example, payroll) and is backed only by an issuing bank or company promise to pay the face amount on the maturity date specified on the note. Since it is not backed by collateral, only firms with excellent credit ratings from a recognized credit rating agency will be able to sell their commercial paper at a reasonable price. Commercial paper is usually sold at a discount from face value and generally carries lower interest repayment rates than bonds or corporate bonds due to the shorter maturities of commercial paper. Typically, the longer the maturity on a note, the higher the interest rate the issuing institution pays. Interest rates fluctuate with market conditions but are typically lower than banks' rates.
Commercial paper, though a short-term obligation, is typically issued as part of a continuous rolling program, which is either a number of years long (in Europe) or open-ended (in the United States).[1]
^Coyle, Brian (2002). Corporate Bonds and Commercial Paper. ISBN 9780852974568. Retrieved November 21, 2013.
Commercialpaper, in the global financial market, is an unsecured promissory note with a fixed maturity of usually less than 270 days. In layperson terms...
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Paper size standards govern the size of sheets of paper used as writing paper, stationery, cards, and for some printed documents. The ISO 216 standard...
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transactions like the processing of checks, notes, and other routine commercialpaper. The law frequently distinguishes between merchants, who customarily...
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century. Modern commercial toilet paper originated in the 19th century, with a patent for roll-based dispensers being made in 1883. Although paper had been known...
trillion commercialpaper market which was wiped out by the change, (exacerbated by money market funds' sudden refusal to support commercialpaper as well)...
the paper. It may be made of recycled paper. Paper cups have been documented in imperial China, where paper was invented by 2nd century BC. Paper cups...
from the conventional platform of treasury bills and call money to commercialpaper, certificates of deposit, repos, forward rate agreements and most recently...
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