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Commercial Paper Market Expands, Finally

For the first time since early January, the market edges up. It's due to financial issuers, of all things.
Stephen Taub, | US
February 26, 2009

After seven weeks of shrinkage, the commercial paper market expanded this past week.

At least a bit. Total outstanding commercial paper increased by $3.2 billion, to $1.524 trillion, for the period ended Wednesday, Feb. 25, according to data from the Federal Reserve Bank.

Most of the past week's gains were driven by financial issuers, which recorded a $10.2 billion increase, to $604.1 billion. In fact, all of the increase from financial issuers came from domestic firms; foreign financial issuers saw their outstanding commercial paper contract.

Asset-backed issuers — which represent the largest segments of the commercial paper market-saw their outstanding paper rise slightly, by $1.7 billion, to a total of $724.1 billion.

On the other hand, commercial paper issued by non-financial companies fell by 8.9 billion, to $194.7 billion.

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