by Calculated Risk on 10/27/2008 11:37:00 AM

I spoke with a senior manager at a public company this morning, and his company has just received loan commitments from two major lenders for an acquisition. Both lenders are on the list of banks receiving capital from the Treasury. This is a marginal credit risk deal, so I consider this a positive sign. The deal isn't done, but this is definite progress. (Note: the company is publicly traded so I can't reveal any details).

LIBOR: From the WSJ: Credit Gauges Little Changed

[LIBOR was] 3.5075%, according to Monday's daily Libor fixing by the British Bankers Association. That's down from 3.51625% Friday ...

The yield on 3 month treasuries: 0.82% up slightly from 0.80% (unchanged)

The Fed is expected to lower rates this week by anywhere from 25 bps to even 75 bps, but I'd still like to see the three month treasury closer to 1.0% (or whatever the Fed Funds rate is this week). The effective Fed Funds rate is about 0.93%, so the three month yield is still a little low.

The TED spread: 2.76 up slightly from 2.70 (slightly worse) This is still way too high. I'd like to see the spread move back down to 1.0 or lower - at least below 2.0.

The two year swap spread from Bloomberg: 117.75 down from 125.02 (better). I'd like to see this under 100.

Activity in the Treasury's Supplementary Financing Program (SFP). This is the Treasury program to raise cash for the Fed's liquidity initiatives. If this program slows down borrowing, I think that would be a good sign.

Here is a list of SFP sales. The Treasury announced another $40 Billion for the Fed this morning - no progress.

The A2P2 spread is 4.32, down from 4.48. better.

During a recession, this spread usually increases because the risk of default for lower quality paper increases. However the recent values (over 400 bps) are far in excess of normal. If the credit crisis eases, I'd expect a significant decline in this spread.

The progress is slow, but this is a positive day in the credit markets.