Interest on a bond is normally paid out every six months, but there are some bonds that pay interest monthly. It can be difficult to purchase long-term bonds in the Dominican Republic because many companies are fearful about borrowing money at a high rate for a long period of time. Just like investors who are looking for a mortgage, they do not want to be locked into a high interest loan if rates should go down in the future. Locking in a high rate over a long period of time is very good for the investor, but is not favorable for the entity borrowing the money. . Commercial Paper or Shorter-Term Fixed Income Investments .
Commercial paper is in effect a very short-term bond, usually for any period less than one year.
Most investors that understand a bank certificate of deposit can relate that to a commercial paper investment. The difference of course is that you are loaning your money directly to a company and not to the bank. In essence it can be said that you are by-passing the bank because in reality banks that offer money market accounts or savings accounts are purchasing commercial paper with depositors funds and keeping the spread between what they really earn and what they pay the depositor. . Most of the commercial paper issued in the Dominican Republic is for a minimum of 90 days. Investors that make this investment are in effect loaning their money to a company for a short-term need.