Pros and cons
Features of commercial paper include reduced borrowing costs; term freedom; and much more liquidity alternatives for creditors because of its trade-ability.
Disadvantages of commercial paper include its eligibility that is limited credit limitations with banking institutions; and paid down reliability due to its strict oversight.
Asset-Backed Commercial Paper (ABCP)
Asset-Backed Commercial Paper (ABCP) is a type of commercial paper this is certainly collateralized by other economic assets. ABCP is normally a short-term instrument that matures between one and 180 times from issuance and it is typically released by way of a bank or any other standard bank.