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FINANCIAL MARKETSDEBT To empower borrowers!IntroductionAn amount of money borrowed by one party from another. A debt arrangement gives the borrowing party permission to borrow money under the condition that it is to be paid back at a later date, usually with interest.The interest rate on a debt instrument is largely determined by the perceived repayment ability of the borrower.Many corporations/individuals use debt instruments as a method for making large purchases that they could not afford under normal circumstances.

Place of tradingMost debt securities are traded over-the-counter, Much of the trading now conducted electronically. The total value of trades conducted daily in the debt markets is much larger than that of stocks, as debt securities/instruments are held by many large institutional investors as well as governments and non-profit organizations.

Types Of Issued Instruments Government securitiesCommercial paperCertificate of depositCall money marketCommercial paper

Features of commercial paperDefinition IssuersEligibility criteria for issuersCompulsory Credit Rating Maturity Period Minimum Investment Issuing & Paying Agent

InvestorsForm of the Instrument Procedure at the time of Maturity Other Features

ADVANTAGESQuick and cost effective wayShort term interestExit optionCheaperReduces the cost of capitalWide range of maturityExemption DisadvantagesLimited availabilityLimited credit Strict regulation