Commercial paper issuers with lower than prime credit ratings often back their commercial paper issues with lines of credit from commercial banks. In these cases, banks agree to make the promised payment on the commercial paper if the issuer cannot pay off the debt at maturity. Thus, a letter of credit backing commercial paper effectively substitutes the credit rating of the issuing firm with the credit rating of the bank. This reduces the paper purchasers’ risk and results in a lower interest rate (and higher credit rating) on the commercial paper. In other cases, the issuing firm arranges a line of credit with a bank (a loan commitment) and draws on this line if it has insufficient funds to repay the commercial paper issue at maturity.