U.S. Commercial Paper Market Contracts for Second Week, Fed Says

The market for corporate borrowing through short-term IOUs contracted for a second week, led by a decline in issuance from financial companies.

The seasonally adjusted amount of U.S. commercial paper dropped $5.1 billion to $1.015 trillion outstanding in the week ended yesterday, the Federal Reserve said today on its website. That’s the lowest level since the period ended Aug. 14.

Commercial paper sold by non-U.S. financial institutions declined $700 million to $260 billion, the second straight decrease, while the amount issued by U.S.-based banks dropped for a third week, falling $5.4 billion to $264.5 billion, according to the Fed.

Corporations sell commercial paper, typically maturing in 270 days or less, to fund everyday activities such as rent and salaries.

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