Commercial Paper
- Commercial Paper is issued for a period shorter than 1 year and usually has a 5-year tenor, automatically renewable for identical periods, unless terminated by either party 30 days before expiry of the then current annual period.
- For the investor, the return on the Commercial Paper is the Interest. Thus, Commercial Paper may be issued at a discount with interest paid at regular intervals, and the rate may be fixed or floating.
- Tax Savings – Exemption from stamp tax over interest and the sum used;
- Flexibility in Treasury Management – Credit solution that makes it possible to adjust the tenor of the issue to the company’s working capital needs, early termination being possible;
- Accessibility – Source of funds accessible to small and medium-sized enterprises;
- Greater Proximity to the Market – Issuing companies become better known, it being easier to launch long-term securities.
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