Asset-backed commercial paper (ABCP) is a short-term debt instrument issued by a special purpose vehicle (SPV) that is backed by various assets like trade receivables, auto loans, or other commercial assets.
The term 'at sight' is commonly used on a bill of exchange to indicate that payment is due upon presentation. It is an immediate payment term contrary to 'after date' or 'after sight' terms.
A relatively low-risk short-term form of borrowing, typically maturing in 60 days or less in the U.S, often used by large creditworthy institutions as a substitute for Treasury bills, certificates of deposit, and similar instruments.
A security representing money borrowed that must be repaid, typically having a fixed amount, specific maturity, and usually a specific rate of interest or an original purchase discount.
Floating debt refers to short-term financial obligations that are continuously refinanced. It is commonly seen in both business and government sectors and includes instruments such as commercial paper and Treasury bills.
Marketable securities are assets on a corporation's balance sheet that can be readily converted into cash, reflecting their liquidity. They include government securities, banker's acceptances, and commercial paper.
Maturity refers to the date at which legal rights in something ripen. In commercial contexts, such as negotiable instruments, it is the time when the paper becomes due and demandable. It also applies to character and emotional development in personnel management.
A Money Market Fund is an open-ended mutual fund that invests in short-term, highly liquid and safe securities, providing investors with money market rates of interest. The net asset value generally remains constant at $1 per share, while the interest rate varies.
A negotiable instrument is a document of title that can be freely transferred from one party to another, allowing for the facilitation of trade and commerce.
Order paper is a type of negotiable instrument that is payable to a specified person or their assignee, requiring the payee to be named with reasonable certainty.
Prime Paper refers to the highest quality commercial paper, rated by major credit rating agencies like Moody's Investor's Service. It is considered investment-grade and is categorized based on its quality level.
Qualified acceptance refers to an acceptance of a bill of exchange that modifies the original terms of the bill. It provides protections for the holder, drawer, and endorsers of the bill.
Rediscounting refers to the process where a bank or financial institution sells short-term negotiable debt instruments, such as bankers' acceptances and commercial paper, which have already been discounted. This service involves the exchange of these instruments for a cash amount that has been adjusted to reflect the prevailing interest rate.
The Uniform Commercial Code (UCC) is a comprehensive set of laws governing all commercial transactions in the United States. It is designed to provide consistency and predictability in the regulation of business activities across all states.
