Definition of Euro-commercial paper

Euro-commercial paper

Short-term notes with maturities up to 360 days that are issued by companies in
international money markets.

Commercial draft

Demand for payment.

Commercial paper

Short-term unsecured promissory notes issued by a corporation. The maturity of
commercial paper is typically less than 270 days; the most common maturity range is 30 to 50 days or less.

Commercial risk

The risk that a foreign debtor will be unable to pay its debts because of business events,
such as bankruptcy.

Convertible eurobond

A eurobond that can be converted into another asset, often through exercise of
attached warrants.

Direct paper

commercial paper sold directly by the issuer to investors.

Euro CDs

CDs issued by a U.S. bank branch or foreign bank located outside the U.S. Almost all euro CDs
are issued in London.

Euro lines

Lines of credit granted by banks (foreign or foreign branches of U.S. banks) for eurocurrencies.

Euro straight

A fixed-rate coupon eurobond.

Eurobank

A bank that regularly accepts foreign currency denominated deposits and makes foreign currency loans.

Eurobond

A bond that is (1) underwritten by an international syndicate, (2) offered at issuance
simultaneously to investors in a number of countries, and (3) issued outside the jurisdiction of any single
country.

Euroclear

One of two principal clearing systems in the eurobond market. It began operations in 1968, is
located in Brussels, and is managed by Morgan Guaranty Bank.

Eurocredits

Intermediate-term loans of eurocurrencies made by banking syndicates to corporate and
government borrowers.

Eurocurrency deposit

A short-term fixed rate time deposit denominated in a currency other than the local
currency (i.e. US$ deposited in a London bank).

Eurocurrency market

The money market for borrowing and lending currencies that are held in the form of
deposits in banks located outside the countries of the currencies issued as legal tender.

Eurodollar

This is an American dollar that has been deposited in a european bank or an U.S. bank branch
located in europe. It got there as a result of payments made to overseas companies for merchandise.

Eurodollar bonds

eurobonds denominated in U.S.dollars.

Euroequity issues

Securities sold in the euromarket. That is, securities initially sold to investors
simultaneously in several national markets by an international syndicate. euromarket.
Related: external market

European Currency Unit (ECU)

An index of foreign exchange consisting of about 10 european currencies,
originally devised in 1979.

European Monetary System (EMS)

An exchange arrangement formed in 1979 that involves the currencies
of european Union member countries.

European option

Option that may be exercised only at the expiration date. Related: american option.

European Union (EU)

An economic association of european countries founded by the Treaty of Rome in
1957 as a common market for six nations. It was known as the european Community before 1993 and is
comprised of 15 european countries. Its goals are a single market for goods and services without any
economic barriers and a common currency with one monetary authority. The EU was known as the european
Community until January 1, 1994.

European-style option

An option contract that can only be exercised on the expiration date.

Euroyen bonds

eurobonds denominated in Japanese yen.

Euro-medium term note (Euro-MTN)

A non-underwritten euronote issued directly to the market. euro-
MTNs are offered continuously rather than all at once as a bond issue is. Most euro-MTN maturities are
under five years.

Euro-note

Short- to medium-term debt instrument sold in the eurocurrency market.

Paper

Money market instruments, commercial paper and other.

Paper gain (loss)

Unrealized capital gain (loss) on securities held in portfolio, based on a comparison of
current market price to original cost.

Trading paper

CDs purchased by accounts that are likely to resell them. The term is commonly used in the euromarket.

Eurobond

A debt security issued in a market other than the home market of
the company issuing the security

European Union (EU)

an economic alliance originally created
in 1957 as the european Economic Community by
France, Germany, Italy, Belgium, the Netherlands, and Luxembourg
and later joined by the United Kingdom, Ireland,
Denmark, Spain, Portugal, and Greece; prior to the Maastricht
Treaty of 1993 was called the european Community;
has eliminated virtually all barriers to the flow of capital,
labor, goods, and services among member nations

European option

An option that can be exercised only on its expiration date.
Contrast with American option.

commercial paper

Short-term unsecured notes issued by firms.

eurobond

Bond that is marketed internationally.

eurodollars

Dollars held on deposit in a bank outside the United States.

Commercial Bank

A privately owned, profit-seeking firm that accepts deposits and makes loans.

Eurodollars

Deposits denominated in U.S. dollars but held in banks located outside the United States, such as in Canada or France.

Commercial Mortgage

A loan made on real estate collateral, other than a residential property, in which a mortgage is given to secure payment of principal and interest.

Commercial Business Loan (Credit Insurance)

An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes.

Swingline facility

Bank borrowing facility to provide finance while the firm replaces U.S. commercial paper
with eurocommercial paper.

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