What is the maximum maturity for commercial paper?

The maximum maturity for commercial paper is indeed 270 days. Commercial paper is a short-term unsecured promissory note issued by companies to raise funds, typically for working capital needs. The short maturity period, which can range from a few days up to 270 days, reflects its purpose as a quick and flexible financing tool.

When companies issue commercial paper, they often do so to manage cash flow or finance receivables, requiring them to balance the time frame of the notes with their expected cash inflows. The limit of 270 days is established by the regulatory framework, which serves to keep this instrument secure and accessible for investors looking for short-term investment options. Beyond this period, issues become more complex, potentially requiring the issuer to seek longer-term financing solutions.

The shorter maturities offered by commercial paper provide companies with a means to meet immediate financing needs while also attracting investors who prefer low-risk, short-term investments.