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Friday, September 14, 2007

Commercial Paper

by Calculated Risk on 9/14/2007 01:52:00 PM

From BusinessWeek: A New Risk to the Credit Markets

The shaky U.S. credit markets will face a critical test over the next few weeks, as companies try to find buyers for hundreds of billions of dollars in short-term debt that is set to expire. Corporate borrowers are expected to struggle in refinancing their debts, and the repercussions may go far beyond the companies in question. ...

The tightest squeeze may come in what's known as the asset-backed commercial paper market. ... About $417 billion worth of asset-backed commercial paper is scheduled to come due during the weeks of Sept. 10 and Sept. 17, or about half of the $959 billion market, according to Sherif Hamid, an investment-grade credit strategist at Lehman Brothers.
For reference, here is the Fed page tracking commercial paper and a couple of charts from the Fed.

Discount rate spread

Commercial Paper Outstanding