• The short-term unsecured debt of corporations or companies.
• 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.
• Abbreviated CP. Bank holding companies issue commercial paper. This is a short-term uncollateralized borrowing by the parent firm.
• An unsecured promissory note with a fixed maturity of no more than 270 days. Commercial paper is normally sold at a discount from face value. Interest rates are higher than CDs since CP is not insured. Interest rate is computed as follows: Price = 100 - Actual discount Actual discount = (Quoted discount) * M / 360 Where M is days to maturity. Annualized interest rate = (100 / Price) ^(365/M)
• A short-term, unsecured promissory note issued by a corporation that has a very high credit standing, having a yield above that paid on Government of Canada treasury bills and comparable to that available on negotiable CDs with similar maturities. A money market financial instrument. Sometimes referred to as corporate paper.
• Is an unsecured, short-term instrument. It has a maximum maturity of 270 days. It is issued by companies which have high credit ratings. This instrument is a cash management tool to finance short-term financial needs. It should be noted that corporate downgrades or bankruptcies can severely damage the value of these instruments.
Practical Advice for Everyone on How to Save and Manage Money: No matter how old or young you are, there are some basic things you can do to better manage and protect your money. Here are recommendations from FDIC Consumer News. More...
Defeat is not the worst of failures. Not to have tried is the true failure. - George E. Woodberry