Capital Markets

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 TaubFebruary 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.