Commercial Paper

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	Commercial paper is a short-term debt security or promissory note (think IOU) issued by large corporations. It typically must be repaid in 270 days or less. Larger, more established corporations with high [[credit ratings agencies|credit ratings]] are able to issue commercial paper at lower interest rates than those that they would pay if they took out a loan or line of credit from a bank. Commercial paper plays a vital role in the U.S. economy, because many companies rely on it to meet regular short term obligations, such as meeting payroll or buying inventory.		Commercial paper is a short-term debt security or promissory note (think IOU) issued by large corporations. It typically must be repaid in 270 days or less. Larger, more established corporations with high [[credit ratings agencies|credit ratings]] are able to issue commercial paper at lower interest rates than those that they would pay if they took out a loan or line of credit from a bank. Commercial paper plays a vital role in the U.S. economy, because many companies rely on it to meet regular short term obligations, such as meeting payroll or buying inventory.
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Revision as of 14:45, December 12, 2008

Commercial paper is a short-term debt security or promissory note (think IOU) issued by large corporations. It typically must be repaid in 270 days or less. Larger, more established corporations with high credit ratings are able to issue commercial paper at lower interest rates than those that they would pay if they took out a loan or line of credit from a bank. Commercial paper plays a vital role in the U.S. economy, because many companies rely on it to meet regular short term obligations, such as meeting payroll or buying inventory.

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