Introduction to Commercial Paper (CP)

Introduction to Commercial Paper (CP)

Join Peter as he explains how the Commercial Paper market works.
Overview

Commercial Paper (CP) is a tradable debt instrument with maturities up to one year. Borrowing in the CP market is one of the tactics companies can use to source short term funding and keep the overall cost of liabilities down. Most large companies issue CP as part of their regular financing activities.

Key learning objectives:

  • Why do borrowers like CP?

  • Why do investors like CP?

  • Who issues CP and who buys CP?

  • What are the 10 steps to issuing CP?

  • Explain the discount factor in CP

  • How do investors get comfortable buying CP?

  • Name five things that can go wrong

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Summary
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