Commercial Paper

Definition of Commercial Paper as it relates to Finance, Debt Financing

Commercial paper refers to an unsecured, short-term debt obligation issued by corporations and financial institutions. It is typically used for financing accounts receivable, inventory, and meeting short-term liabilities. Commercial paper is usually sold at a discount from its face value and matures in 270 days or less. It is considered a safe investment due to the high credit quality of the issuers and the short maturity period.

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