commercial paper


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commercial paper,

type of short-term negotiable instrument, usually an unsecured promissory note, that calls for the payment of money at a specified date. Because it is not backed by collateral, commercial paper is usually issued by major firms whose credit-rating is so good that their notes are immediately accepted for trading. The notes are sold at a discount and mature in from three to six months. Commercial paper is an important source of cash for the issuing firm; it supplements bank loans and is usually payable at a lower rate of interest than the prime discount rate. Strictly speaking, it includes only those instruments that are used in commerce in place of money, as distinguished from paper used in investment, personal, estate, speculative, and public transactions. In addition to promissory notes, commercial paper may include drafts, bills of exchange and checks, acceptances, bills of lading, warehouse receipts, orders for delivery of goods, and express orders. See. N. D. Baxter, The Commercial Paper Market (1969); Steve H. Nickles, Commercial Paper (1988).
References in periodicals archive ?
Commercial Paper Index consists of commercial paper with one-to-three month maturities issued by corporate issuers, both financial and non-financial.
In addition, a bank issued a letter of credit on the commercial paper, in effect promising to pay for the loan if the county defaults, said Ken Kurtz, a Moody's Investors Service bond analyst who follows Los Angeles County.
5 billion 364-day revolving-credit facility for general corporate purposes including a backup for commercial paper.
Each commercial paper maturity shall be match-funded to the settlement date of each swap and the referenced obligations.
The commercial paper notes are secured by a junior lien pledge of gross revenues generated from the ownership and operation of SMMPA's system.
The GO extendible municipal commercial paper has original maturities from one day to 180 days from the original issue date of each note.
commercial paper is rated 'F-1' by Fitch, as is the Euro commercial paper issued by Petrofina International Group and PDI.
These funds were deposited with The Royal Trust Company, trustee for the holders of the commercial paper, by GWU Investors Limited which obtained such funds as a result of the sale, previously announced, by GWU Investments Limited to GW Utilities Limited of certain proceeds of the special dividends which GWU Investments is entitled to receive from GW Utilities Limited on April 14, 1992.

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