Commercial papers, CPs (also referred to in German; less frequently, discounted money market instruments)

Generally, all money market instruments in the form of discounted debt securities with maturities of one day to less than one year. The yield is calculated on the basis of the price gain; commercial paper generally has no coupon payments (short-term unsecured promissory notes issued by corporations in need of short-term loans. Typically commercial paper is sold in multiples of EUR 100,000 and maturities range from a few days up to 270 days). – Issuers are usually highly creditworthy corporations that cover short-term financing needs in this way (commercial paper is usually issued by corporations with very high credit standings). Banks act as intermediaries (placers) in the issuance of commercial paper by forwarding the commercial paper to potential investors. In this way, funds flow directly from the investor to the depositor or borrower without a custody transaction being concluded with the bank. – See discount paper, asset-backed commercial paper, bank bond, certificates of deposit, euro commercial paper, Euronotes, notes, private placements. – See the Deutsche Bundesbank’s monthly statistical supplement “Capital Market Statistics” on the scope of placements and, in the explanatory notes, important definitions and classifications, Deutsche Bundesbank Monthly Report of May 1993, pp. 59 ff (broad presentation; compare CPs with short-term bank loans).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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