From Investopedia:

An example of commercial paper is when a retail firm is looking for short-term funding to finance some new inventory for an upcoming holiday season. The firm needs $10 million and it offers investors $10.1 million in face value of commercial paper in exchange for $10 million in cash, according to prevailing interest rates. In effect, there would be a $0.1 million interest payment upon maturity of the commercial paper in exchange for the $10 million in cash, equating to an interest rate of 1%.

This looks and smells very much like corporate bonds. Except for: 1. They aren't registered with the SEC 2. They can't be longer than 270 days

Is there any difference between commercial papers and corporate bonds?

1 Answer 1


Just the term. Commercial paper is short-term borrowing - days instead of years. Structurally they are similar in that they are unsecured obligations, but commercial paper doesn't pay coupons - it's just sold at a discount to create value.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .