ERM Glossary: Commercial Paper (CP)
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Commercial paper is an unsecured
promissory note usually issued to finance short-term credit needs. It specifies
the face amount paid to investors on the maturity date. Commercial Paper can be
issued as an unsecured obligation of a banking group or, for example when
issued by a group’s conduit, as an asset-backed obligation (in which case it is
referred to as asset-backed commercial paper).
Commercial Paper is usually issued
for periods from as little as a week up to nine months.
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