Commercial Paper at Five-week High

According to Federal Reserve data, total commercial paper topped $1.7 trillion for the week ended Wednesday, up by $48.6 billion from the previous week. The total is also nearly $100 billion higher than it was just four weeks ago.

Last week's gains were across the board, with the biggest percentage increase recorded by financial firms, which saw their total outstanding surge by more than $34 billion. In the past four weeks, outstanding commercial paper issued by financial firms is up more than 13 percent.

Some of the improvement may be the result of the government's program to buy the highest-rated 90-day commercial paper. Yet even lower rated paper has improved. Among A2/P2 nonfinancial paper, considered to be the most risky, average daily volume is up more than 40 percent since the end of November alone.

The total commercial paper market still is down from $1.82 trillion three months ago and the peak of $2.2 trillion during the summer of 2007.

In other encouraging credit-related news, the three-month Libor rate dipped below 2 percent Thursday morning, which experts hailed as another sign the credit markets are becoming more hospitable.