Commercial Paper Market Erases Previous Week’s Decline, Fed SaysJohn Parry
The market for corporate borrowing through commercial paper erased last week’s decline, led by a surge in issuance from financial institutions.
The seasonally adjusted amount of U.S. commercial paper rose $19.5 billion to $1.022 trillion outstanding in the week ended yesterday, the Federal Reserve said today on its website. The market, which contracted by that amount the previous week, has climbed from $924.4 billion in the week ended Oct. 24, the lowest level since January 2011.
Commercial paper sold by non-U.S. financial institutions rose for a fifth week, increasing $9 billion to $236.8 billion outstanding, while the amount issued by U.S.-based banks rose $3.6 billion to $301.6 billion, the first increase in six weeks, according to the Fed.
Corporations sell commercial paper, typically maturing in 270 days or less, to fund everyday activities such as rent and salaries.