Q: How do Commercial Papers work?
CPs are like Treasury bills (“T-Bills”) because they are issued at discount rates, which may be paid upfront or capitalized.
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Q: What are commercial papers?
Commercial Papers (“CPs”) are unsecured short-term debt instruments issued by corporates to get funds from the public (private individuals, institutional investors, non-governmental organizations, religious bodies etc.) to meet short-term debt ...
Q: Primary and Secondary Market for Commercial Papers
A CP can be purchased either in a primary or secondary market. The primary market is where investors buy financial instruments at issuance, while in the secondary market, investors trade (i.e., buy and sell) instruments purchased at primary market ...
Q: What do I Benefit from Investing in Commercial Papers?
While CPs in Nigeria are typically issued by blue chip corporates with impressive track records of financial performance, this does not eliminate credit risk. The discount rate on the CP is usually reflective of the credit rating of the issuer, which ...
Q. How to calculate your Commercial Paper Investment Returns
Stage 1 Under current terms (interest rate & 182-day tenor), investor puts N5m to work. However, this represents Face value "FV" (A) to be received at maturity. Interest works out to -N514k (B) which if taken upfront, means the actual/real amount ...
Q: How do Treasury Bills work?
T-Bills are discount instruments, and they are so called because the investor gets its interest upfront. This means that the interest promised on a T-bill instrument is payable on the very day the investment commences. For instance, if a T-bill ...