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STN
Short Term Notes
If a company does not meet the criteria to issue CP, it can issue a STN on the condition that it receives a favorable credit rating from Global Credit Ratings (GCR). In some cases, the company may wish to raise a STN in order to be free from the bureaucracy of CMA. An example of this is the STN that was raised for Athi River Mining. STN's unlike CP are privately issued, transferable if desired, and can only be invested in by institutional investors. Finally, STN's can be renewed without regulatory approval.
Placement agents, such as DAL, then sell CP to investors. There is no special role for commercial banks in CP issuance. Nevertheless, most banks have come to realize that major international corporations have earned themselves a reputation that permits them to raise funds directly from investors in the form of CP.
If a company does not meet the criteria to issue CP, it can issue a STN on the condition that it receives a favorable credit rating from Global Credit Ratings (GCR). In some cases, the company may wish to raise a STN in order to be free from the bureaucracy of CMA. An example of this is the STN that was raised for Athi River Mining. STN's unlike CP are privately issued, transferable if desired, and can only be invested in by institutional investors. Finally, STN's can be renewed without regulatory approval.
Placement agents, such as DAL, then sell CP to investors. There is no special role for commercial banks in CP issuance. Nevertheless, most banks have come to realize that major international corporations have earned themselves a reputation that permits them to raise funds directly from investors in the form of CP.