MARF, BME’s Fixed Income market, today registered a new commercial paper (CP) programme from Portuguese private healthcare company José de Mello Saúde (JMS). The programme has a maximum outstanding balance of 50 million euros. Through this new financing tool, JMS will be able to issue – over a year and in a flexible manner- individual tranches of CPs.

These tranches are intended for wholesale qualified investors with maturities of up to 397 days.  The main objective of the company with the set-up of this programme is to expand its funding sources and continue to diversify its investor base.

José de Mello Saúde is the first Portuguese issuer with a Commercial Paper programme in this Fixed Income market of BME.

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Commercial Papers are an efficient source of funding

Commercial Papers are short-term money-market securities used as a funding source by financial institutions, as well as governments, supranational agencies and mid and large corporations.

For corporate issuers, Commercial Papers are an extremely efficient funding source, that is complementary to banking facilities and credit lines. It is an efficient working capital solution via Debt Capital Markets.

Commercial Papers are issued under a shelf programme, that has an annual validity (renewable) and a predetermined maximum outstanding size. Notes under a CP programme may be issued at a discount or at a premium, they may bear fixed or floating rate interest. Although CPs, most usually, carry an implicit coupon, they are issued at discount and mature at par (100%)

Maturity of notes ranges from 3 days to 24 months for Pagarés Programmes and from 1 to 364 days for ECP (European Commercial Paper Programmes).

Commercial Papers are multi-currency instruments that can be issued in different currencies; predominantly in EUR, USD, CHF and GBP. They have a minimum denomination of €100K and are intended for wholesale institutional investors, both national and international.

Source: BME (see the entire post)