Commercial paper is not usually backed by any form of collateral, so only firms with high-quality debt ratings will easily find buyers without having to offer a substantial discount (higher cost) for the debt issue.
A major benefit of commercial paper is that it does not need to be registered with the Securities and Exchange Commission (SEC) as long as it matures before nine months (270 days), making it a very cost-effective means of financing. The proceeds from this type of financing can only be used on current assets (inventories) and are not allowed to be used on fixed assets, such as a new plant, without SEC involvement.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
commercial paper — see paper Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. commercial paper … Law dictionary
Commercial paper — Commercial Com*mer cial, a. [Cf. F. commercial.] Of or pertaining to commerce; carrying on or occupied with commerce or trade; mercantile; as, commercial advantages; commercial relations. Princely commercial houses. Macaulay. [1913 Webster]… … The Collaborative International Dictionary of English
commercial paper — /ingl. kəˈmYːʃəlˌpeɪpə(r)/ [propr. «carta (paper) commerciale (commercial)»] loc. sost. f. inv. (econ.) cambiale finanziaria … Sinonimi e Contrari. Terza edizione
commercial paper — ☆ commercial paper n. 1. negotiable instruments, as bills of exchange, used regularly in the course of business 2. Finance short term promissory notes issued by large corporations and sold to investors either directly by the issuer or through… … English World dictionary
Commercial paper — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond … Wikipedia
commercial paper — Unsecured, short term promissory notes issued by corporations for specific amounts and with specific maturity dates. Firms with lower ratings or firms without well known names usually back their commercial paper with guarantees or bank letters of … Financial and business terms
Commercial paper — 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. The New York Times Financial Glossary * * * commercial paper … Financial and business terms
commercial paper — A relatively low risk short term (maturing at 60 days or less in the US but longer in the UK) unsecured form of borrowing. Commercial paper is often regarded as a reasonable substitute for Treasury bills, certificates of deposit, etc. The main… … Big dictionary of business and management
commercial paper — Negotiable instruments, drafts, checks, certificates of deposit, and promissory notes. The term also includes bearer bonds where such are not specifically excluded from the classification by statute. 11 Am J2d B & N § 8. The Uniform Commercial… … Ballentine's law dictionary
commercial paper — A relatively low risk short term (maturing at 60 days or less in the US but longer in the UK) unsecured form of borrowing. Commercial paper is often regarded as a reasonable substitute for Treasury bills, certificates of deposit, etc. The main… … Accounting dictionary