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Unsecured

• Is a credit instrument which a lower priority of claim against a borrower. This compares to Secured Debt.

 
 Embedded terms in definition
 Credit
Debt
Secured debt
Secured
 
 Referenced Terms
 Bank notes: Unsecured notes issued by a bank in the form of an MTN. No FDIC premium is paid by the issuing bank.

 C&i: Commercial and Industrial loans are also known as C&I loans. They are issued to mining, manufacturing, trade, transport, construction, and services firms. They may be secured or Unsecured. They may be made on the spot loan or as a loan commitment. They can involve revolving versus take-it-or-leave-it loans.

 Collateral trust bond: A bond in which the issuer (often a holding company) grants investors a lien on stocks, notes, bonds, or other financial asset as security. Compare mortgage bond.Is a security issued by a corporation and is secured by other securities. This bond compares to Mortgage Backed Securities which are secured by real property or Unsecured bonds. Depending on the underlying collateral and the terms of the issue, these bonds can offer somewhat better financing rates to the issuer.

 Commercial and industrial loans c&i loans: Loans made to mining, manufacturing, trade, transport, construction, and service firms. These can be secured and Unsecured, spot loan or a loan commitment, revolving or take-it-or-leave it type of loan.

 Commercial paper: The short-term Unsecured debt of corporations or companies.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.Abbreviated CP. Bank holding companies issue commercial paper. This is a short-term uncollateralized borrowing by the parent firm.An Unsecured promissory note with a fixed maturity of no more than 270 days. Commercial paper is normally sold at a discount from face value. Interest rates are higher than CDs since CP is not insured. Interest rate is computed as follows:
Price = 100 - Actual discount
Actual discount = (Quoted discount) * M / 360 Where M is days to maturity.
Annualized interest rate = (100 / Price) ^(365/M)A short-term, Unsecured promissory note issued by a corporation that has a very high credit standing, having a yield above that paid on Government of Canada treasury bills and comparable to that available on negotiable CDs with similar maturities. A money market financial instrument. Sometimes referred to as corporate paper.Is an Unsecured, short-term instrument. It has a maximum maturity of 270 days. It is issued by companies which have high credit ratings. This instrument is a cash management tool to finance short-term financial needs. It should be noted that corporate downgrades or bankruptcies can severely damage the value of these instruments.

 
 Related Terms
 Unsecured debt
Unsecured loan
Unsecured short term financing

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