QUICK DEFINITION
Commercial Paper is short-term unsecured debt issued primarily by corporations to fund working-capital and liquidity needs.
WHY IT MATTERS
Why Commercial Paper matters in bond markets
Stress in commercial paper can reveal pressure in corporate short-term funding before it appears in longer-term bond markets.
MARKET CONTEXT
How to think about it
Bond investors use commercial paper as part of a wider framework that links prices, yields, cash flows, liquidity and risk. The concept should therefore be read together with its related terms rather than as an isolated definition.
Is Commercial Paper important for fixed-income investors?
← Back to the Bond Market Glossary Yes. Stress in commercial paper can reveal pressure in corporate short-term funding before it appears in longer-term bond markets.