Source AP ©

Commercial paper falls lately

The market for short-term corporate debt known as commercial paper fell in the latest week.

The total amount of commercial paper outstanding fell $3.6 billion (2.46 billion EUR) in the week ended Wednesday, following a decrease of $15.8 billion (10.79 billion EUR) the previous week, the Federal Reserve reported on its Web site Thursday.

The riskiest part of the market, commercial paper backed by collateral that includes poor-quality mortgages, contracted by just $600 million (410 million EUR) last week, the smallest drop in 14 straight weeks of declines begun in mid-August, Fed statistics showed.

The latest results continue "a trend toward stabilization following a drubbing in August and early September," said Tony Crescenzi, senior fixed-income analyst at Miller Tabak.

"The improvement in the asset-backed sector in the latest week will be a relief to those who focused on last week's data, which saw the asset-backed sector contract by $29.5 billion (20.15 billion EUR), its largest contraction in two months," he said.

The commercial paper market, which seldom attracts much attention, was hit hard in August by a dramatic increase in risk aversion as investors sought cover from the shakeout in the below prime lending and corporate credit markets.

In good times, commercial paper provides an easy way for companies to get short-term operating capital while avoiding formalities such as registering bond sales with the government. These assets tend to feature lower interest rates than longer-term bonds and often require little beyond the good name of the issuer to bring about a sale.

Comments
China wants Moscow to confront pressure from Washington together
It is about time Russia should exit Western project
U.S. Humiliates South Korea, Threatens North Korea
USA will seize Kuril Islands immediately if Russia delivers them to Japan
Cars freeze deep into ice as Arctic cold hits Russia
NATO embraces Russia with wings of love
Europe's largest mosque to be built in Crimea
Ticking Time Bomb: Countdown to Armageddon
Ticking Time Bomb: Countdown to Armageddon
Ticking Time Bomb: Countdown to Armageddon
Cars freeze deep into ice as Arctic cold hits Russia
Cars freeze deep into ice as Arctic cold hits Russia
Cars freeze deep into ice as Arctic cold hits Russia
China wants Moscow to confront pressure from Washington together
China wants Moscow to confront pressure from Washington together
IOC wants Russia to boycott 2018 Winter Games and exit Olympic movement
IOC wants Russia to boycott 2018 Winter Games and exit Olympic movement
IOC wants Russia to boycott 2018 Winter Games and exit Olympic movement
Ticking Time Bomb: Countdown to Armageddon
Ukraine's Western allies point their guns at President Poroshenko
IOC wants Russia to boycott 2018 Winter Games and exit Olympic movement