82,891
edits
Commercial paper: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 1: | Line 1: | ||
A form of [[negotiable]] [[debt security]] characterised by very short [[term]] — typically up the three months maturity — and high credit rating (often AAA). There is usually a ready supply of investors ready to “[[roll]]” their [[commercial paper]] (in other words, reinvest the proceeds of a maturing commercial paper in a fresh issue from the same issuer. Commercial paper is thus seen as low risk, and usually therefore usually quite [[liquid]]. | {{a|repack|}}A form of [[negotiable]] [[debt security]] characterised by very short [[term]] — typically up the three months maturity — and high credit rating (often AAA). There is usually a ready supply of investors ready to “[[roll]]” their [[commercial paper]] (in other words, reinvest the proceeds of a maturing commercial paper in a fresh issue from the same issuer. Commercial paper is thus seen as low risk, and usually therefore usually quite [[liquid]]. | ||
This can lead [[commercial paper]] issuers to see their CP has a kind of evergreen debt facility, which it is — ''until it isn’t''. [[Commercial paper]] is not ''always'' liquid, and investors won't always roll it, as the 2007 [[credit crunch]] ably demonstrated. | This can lead [[commercial paper]] issuers to see their CP has a kind of evergreen debt facility, which it is — ''until it isn’t''. [[Commercial paper]] is not ''always'' liquid, and investors won't always roll it, as the 2007 [[credit crunch]] ably demonstrated. | ||