Commercial Paper

Commercial paper securities are short-term, unsecured (promissory notes) debt instruments issued by corporations that mature in no longer than 270 days. As this instrument is unsecured, it is usually issued by companies with a good credit rating. Yields on commercial papers are typically higher than government securities of similar maturities, reflecting the risk spread. Like treasury bills, most commercial papers are issued on a discount basis. For further details see: ISRA, Islamic Financial System; Principles and Operations.


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