Chapter 21OTHER DEBT PRODUCTS
What a choice!
In the previous chapter, we first presented the bond as a debt product and we illustrated the key features of a debt product through this simple security. The reader will now discover that there are actually a very large number of products that follow the same logic as that of a bond: remuneration independent from the financial performance of the firm, a commitment to reimburse, and in the event of insolvency: priority over equity in the reimbursement of the money owed.
Whether short, medium or long term, market or bank, these instruments increasingly have an ESG dimension either through the use of proceeds or through an interest rate whose level depends on the achievement of environmental, social or governance objectives, such as the sustainable bonds presented in the previous chapter. These are known as green loans and impact loans.
Section 21.1 MARKETABLE DEBT SECURITIES
1/ SHORT-TERM MARKETABLE SECURITIES
The term bond (see previous chapter) is used to refer to marketable securities with maturity of over one year, but firms can also issue shorter-term instruments. Commercial paper refers to negotiable debt securities issued on the money market by large (and now medium-sized) companies for periods ranging from one day to one year. In practice, the average maturity of commercial paper is very short, between one and three months. Issuers can also launch paper denominated in foreign currency.
Short-term European paper (STEP) ...
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