Arrangement & Issuance of Commercial Papers (CPs)

Commercial Paper is defined as a money market instrument that is used for obtaining short-term funding and is usually in the form of a promissory note issued by a corporation, typically for the financing of accounts payable and inventories and meeting short-term liabilities. Commercial paper generally matures in a short period of time and usually does not exist for more than 270 days. The average maturity of commercial paper is between 30 and 35 days. Commercial paper is usually issued at a discount from face value and reflects prevailing market interest rates.

 

Commercial paper is not usually backed by any form of collateral, making it a form of unsecured debt. As a result, only firms with high-quality debt ratings will easily find buyers without having to offer a substantial discount (higher cost) for the debt issue. Because commercial paper is issued by large institutions, the denominations of the commercial paper offerings are substantial, usually $100,000 or more. Other corporations, financial institutions, wealthy individuals, and money market funds are usually buyers of commercial paper.

 

SFCS coupled a good number of professional and technical expertise along with extensive industry knowledge for the documentary support to issuance of commercial paper and arrangement of buyer side.