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.

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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 >>
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