A commercial paper program is an instrument used to raise short-term funds with a term of up to one year.
Issuance of commercial paper makes it possible:
- to enhance a company’s ability to cover temporary cash shortfalls, finance capital construction and investment products;
- to smooth out seasonal and other fluctuations in a company’s current accounts and cash flows;
- to replace expensive credits and loans;
- to raise funds not only from banks and other professional financial market participants, but also from companies which have temporary free cash flows;
- to stimulate settlements with debtors by using the company’s paper, which makes it possible to reduce the amount of overdue receivables.
The Bank’s basic package of services includes:
- consulting with the drawer on issues concerning organization of the commercial paper program;
- forming a syndicate and coordinating the actions of parties to the commercial paper program;
- recording and monitoring paper issued;
- determining and agreeing on the levels of rates, terms and amounts of paper issued;
- preparing and issuing press releases for the media on major events which arise in the course of the commercial program (issue, redemption, etc.);
- preparing and participating in PR events (conferences, road shows, presentations, etc.);
- performing an analysis of the Borrower’s financial activities;
- drafting an information memorandum;
- providing market maker services in OTC trade systems such as Russian OTC Network, National Cleaning System, etc.
