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Have you heard of commercial paper?
Commercial paper is similar to TBills but difference is that it is issued by large corporations with good credit ratings.
Like private sector kind of TBills.
So if a company needs funds,
It can bypass the banks and come to the general public
Commercial paper is similar to TBills but difference is that it is issued by large corporations with good credit ratings.
Like private sector kind of TBills.
So if a company needs funds,
It can bypass the banks and come to the general public
The commercial are issued as short-term debt/loan.
The duration is no longer than 270 days.
These papers can be readily traded
So that means you can easily get your cash back.
They are issued by large corporations with good credit ratings.
The duration is no longer than 270 days.
These papers can be readily traded
So that means you can easily get your cash back.
They are issued by large corporations with good credit ratings.
So you're asking what is the risk?
The companies that issue commercial papers are graded.
Meaning, they're rated based on their financial statements, history and risk of them not honouring their promise.
This grading also affects the kind of return they will promise
The companies that issue commercial papers are graded.
Meaning, they're rated based on their financial statements, history and risk of them not honouring their promise.
This grading also affects the kind of return they will promise
Because the government is the strongest backer of any security.
The returns on CP are usually higher than that of TBills and Bonds .
However, lower than they might have gotten a loan from the banks.
Risk and return is usually higher than TBills and Bonds
The returns on CP are usually higher than that of TBills and Bonds .
However, lower than they might have gotten a loan from the banks.
Risk and return is usually higher than TBills and Bonds
In summary,
Companies are saying instead of leaving your money in the bank or buying T-Bills
Give your money to us
We will give you a return higher than savings and T-Bills
Contact your asset management house if you'd like to invest
Companies are saying instead of leaving your money in the bank or buying T-Bills
Give your money to us
We will give you a return higher than savings and T-Bills
Contact your asset management house if you'd like to invest
Commercial Paper has a risk element.
They are unsecured meaning if the company shuts down there's no protection and that's why they're graded.
The interest is paid upfront like Treasury Bills
E.g Dangote Cement sold N50 Billion worth of CP recently.
They are unsecured meaning if the company shuts down there's no protection and that's why they're graded.
The interest is paid upfront like Treasury Bills
E.g Dangote Cement sold N50 Billion worth of CP recently.
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I run a personal finance platform that simplifies things, teaches you how to ditch poor financial habits and also to sustainably grow wealth
Pls follow us
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instagram.com/moneyafrica
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