Commercial papers for liquidity acquisition and initial engagement with investors
Commercial papers are the way to liquidity and first contact with institutional investors.
An alternative to short-term bank funding
Commercial papers are very similar in nature to bonds, but differing in maturity, as commercial papers are intended for short-term funding. Commercial papers are a frequent alternative to short-term bank loans, with a typical maturity of a few months to a year.
Commercial papers are usually issued by:
Fast-growing and established companies
Companies with a good credit rating
Businesses in need of additional short-term funding
The main reason for issuing a commercial paper is usually the dispersion of investors with standardized communication and terms. At the request of institutional investors, a commercial paper is often issued first to establish cooperation, followed by a bond issue or a stock market listing of the company.
With our help, you’ll secure a commercial paper that attracts investors
The key to success in raising new financing by issuing a commercial paper is to design the terms that are attractive to investors from the outset. To this end, we advise and assist you in the optimal structuring of your commercial paper.
Together, we define the following features:
Issue size and currency
Number of commercial papers and the denomination (per item)
Maturity date or duration
Interest rate and method of interest repayment
Main risks and financial obligations
Most often, companies issue commercial papers in the amount of EUR 3 to 5 million for a period of 3 to 12 months. The interest rate is usually fixed and the amount depends on market interest rates.
Informal screening of investor interest (“market test”)
Before incurring any major costs and taking a final decision on whether to issue a commercial paper, we always carry out informal checking with potential institutional or individual investors. The market test does not constitute an actual commercial paper offering, but serves as an orientation for the formation of a financial instrument.
Creating a “teaser”
Selecting the most suitable investors from our database and informally checking interest
Updating the terms and structure of the commercial paper, if necessary
Legal and financial execution of the entire procedure
Having completed a successful market test, we carry out the entire commercial paper issuance process, from the preparation of the documentation to communication with investors and regulators. We advise you throughout the whole process, both from the point of view of issuing the commercial paper and the overall optimization of financing sources.
The process of issuing a bond:
Step 1: Establishing the basic terms of a commercial paper
Step 2: Terms and conditions of the commercial paper issue and Factsheet
Step 3: Systematic presentation of the opportunity to investors (formal offer)
Step 4: Deposits via the Equito Platform and customer service
Digitized commercial paper issuance process
The Equito Platform digitizes the entire commercial paper issuance process and makes it user-friendly. Our platform, together with the support of our Customer Service staff, ensures a seamless investment journey, from registration on the platform to the full transfer of funds.
A typical fully digitized investment process for investors:
Investors register on the platform (via secure Auth0 system)
Pass KYC and KYB
Make a transfer of funds
Choose an investment with all key information in one place
Sign the subscription form and make the investment
Equito issues the commercial paper on behalf of the issuer with the Central Securities Clearing Depository (CSD). Equito transfers the collected funds to the issuer.