Euro-Commercial PaperEuro-Commercial Paper is defined as a short term loan that is issued in the international money market. The short-term loans are issued by corporations or banks and are in a currency that differs from that banks or corporations domestically used currency. The maturities of the paper range up to 360 days. The word "Euro" denotes that the debt is held outside the issuers natural borders. For example, Eurodollars are simply dollars held in foreign banks.

A few key distinctions arise when comparing Euro-Commercial Paper (CP) to U.S. commercial paper. Primarily, the maturity periods between the two, Euro-Cp on average has a maturity date that can be twice as long as the maturity period of U.S.-Cp. Another key difference is the way the respected commercial papers are traded. U.S. Cp is usually held by its investors until the maturity date whereas Euro-Cp is actively traded in a secondary market.

The main users of Euro-Cp are; countries central banks, traditional commercial banks and corporations. All of whom use Euro-Cp as way of raising more capital through the international money market. Distribution of the paper is not significantly worse than the distribution of U.S.-Cp this is important because it shows banks as buyers of less-than-prime paper.

A main benefit of Euro-Cp is that it is multidenominational so issuers can borrow from a multitude of currencies. Since the markets founding in 1985 most Euro-Cp was denominated into dollars. Only until recently have nondollar issuers become apparent, they now account for more than 60 percent of all Euro-Cp issues. It is also beneficial to allow subsidiaries based overseas to fund projects in their local currencies.

For investors investing in Euro-Cp allows for substantial interest savings when a commercial-paper issue is joined with a cross -currency swap rate. Today a little less than half of all issues are swapped. The advancement of technology has allowed investors to take advantage of the arbitrage opportunities that arise in the Euro-commercial paper market. 

Works Cited:
www.investopedia.com
http://www.investopedia.com/terms/e/eurocommercialpaper.asp