Fine Paper

DEFINITION of 'Fine Paper'

High-quality securities that are assumed to be risk free, or commercial paper that is issued by solid blue-chip companies that have minimal risk of default. Fine paper will trade at a small spread over government issued fixed-income securities to reflect their marginal risk over truly risk-free debt.

BREAKING DOWN 'Fine Paper'

Fine paper, by virtue of its sterling credit quality, generally offers yields that are lower than those of lower rated securities. In the fourth quarter of 2008, however, the credit crunch resulted in a near-total freeze of the U.S. commercial paper market, and even the finest of paper was subject to financial uncertainty.

RELATED TERMS
  1. Paper Dealer

    A market maker that buys and sells extremely short-term corporate ...
  2. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, ...
  3. Government Paper

    Debt securities that are issued or guaranteed by a sovereign ...
  4. Paper Trade

    Using simulated trading to practice buying and selling securities ...
  5. Commercial Paper Funding Program ...

    A program instituted in October of 2008 that created the Commercial ...
  6. Bad Paper

    Unsecured short-term fixed income instrument that is issued either ...
Related Articles
  1. Bonds & Fixed Income

    Introduction To Commercial Paper

    Commercial paper is a short-term instrument that can be a viable alternative for retail fixed-income investors looking for a better rate of return on their money.
  2. Retirement

    Money Market: Commercial Paper

    For many corporations, borrowing short-term money from banks is often a laborious and annoying task. The desire to avoid banks as much as possible has led to the widespread popularity of commercial ...
  3. Investing

    Commercial Paper

    Commercial paper is a short-term debt security issued by financial companies and large corporations. The corporation promises the buyer a return, or profit, for making the loan. The return is ...
  4. Trading Strategies

    Pros And Cons Of Paper Trading

    Most market novices should paper trade for a considerable amount of time, despite key drawbacks.
  5. Professionals

    Cash and Equivalents (Contd.)

    Cash and Equivalents (Contd.)
  6. Professionals

    Other Types of Bonds

    CFA Level 1 - Other Types of Bonds. Learn the other types of bonds issued in the market. Contrasts corporate bonds from medium-term notes, commercial paper and negotiable CDs.
  7. Professionals

    Money Market Instruments

    Money market instruments are highly liquid, fixed-income securities issued by govern- ments and corporations with high credit ratings. Because of the high quality of the issuers and because of ...
  8. Bonds & Fixed Income

    5 Signs Of A Credit Crisis

    These indicators can illuminate the depth and severity of problems in the credit markets.
  9. Professionals

    Corporation and Financial Institution Instruments

    FINRA Series 6 Exam Study Guide - Corporation and Financial Institution Instruments. Deals with the various ways for corporations and Banks to raise short-term funds in the money market such ...
  10. Professionals

    The Federal Reserve

    FINRA/NASAA Series 65: Section 8 The Federal Reserve. In this section the federal reserve's role in money markets.
RELATED FAQS
  1. Can a business ever be too small to issue commercial paper?

    See why market forces regulate the size of companies that issue commercial paper, even though there are no official regulations ... Read Answer >>
  2. How can retail investors invest in commercial paper?

    Find out how individual retail investors can purchase short-term commercial paper, but why it rarely makes good investment ... Read Answer >>
  3. What happens when a company defaults on its commercial paper obligations?

    Read about the possible consequences of a large corporation defaulting on its commercial paper obligations even though the ... Read Answer >>
  4. Can retail investors buy commercial paper?

    Find out whether retail investors buy commercial paper, and learn about the restrictions that often prevent individual investors ... Read Answer >>
  5. What are some examples of securities that can be found in a money market fund?

    Learn about examples of securities found in money market accounts. These securities need to be safe, liquid and of short-term ... Read Answer >>
  6. In what types of financial situations would credit spread risk be applied instead ...

    Find out when credit risk is realized as spread risk and when it is realized as default risk, and learn why market participants ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center