It concerns a debt position that is entered into with a bank or another financial institution, to which no collateral is given. The company will have to have a good track record if it wants to be able to issue a commercial paper. A commercial paper is a relatively cheap way for a company to provide the necessary liquidity.
The duration of the commercial paper, which is intended primarily to fill temporary liquidity shortages, is usually less than two years, generally between one and six months.
Commercial paper is issued in large denominations (not less than EUR 500,000) and is primarily intended to be placed with professional investors (institutional investors and banks).