Example Of Commercial Paper In Pakistan

Commercial paper is a short term debt security issued by well known creditworthy firms.

Example of commercial paper in pakistan. 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 investment grade banks and corporations. For example assume that san marcos could purchase a treasury bill that had 2 months until maturity and had a par value of 100 000 and a price of 99 000. If the discount is 1 and other charges worth 15000 were applicable.

The average investment is about 100 000 but some commercial paper investments are made in multiples of 1 million or more. Most commercial papers are easily rolled over by paying for old issuance from the proceed of new issuances. The regulation of commercial transactions by the laws of contract tort and related fieldsthe uniform commercial code ucc which governs sales and commercial paper has been adopted in some form by almost all states.

Commercial paper is issued at a discount to face value basis but it can be issued in interest bearing form. Issue of commercial papers regulations 2013 gazette of pakistan extraordinary part ii 6 th february 2013. Find out the rate of interest on this commercial paper.

The average maturity period of commercial paper lies between thirty to thirty five days. Example of commercial paper. Commercial paper is a low risk investment and is usually issued by those companies who have high credit ratings.

Commercial paper as an secp source explained is a short term promissory note issued by corporations with a minimum credit rating of a for long term and a2 in short term arrangements. It serves the firm as an alternative to a short term loan from a bank. The regulation of commercial entities by the laws of company partnership agency and bankruptcy 2.

The average maturity of commercial paper is between 30 and 35 days. The most important thing about commercial paper is that it matures within a short span of time and will not usually exceed 270 days. Commercial paper is a short term money market instrument comprising usince promissory note with a fixed maturity.