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Monday, October 27, 2008

Commercial Paper Freeze Up


Nearly two weeks after the Federal Reserve announced it would step in to support commercial paper, investors are still uncertain whether it will be enough to jump-start the $1.45 trillion dollar debt market.

The Federal Reserve's facility, which becomes operational on Monday, Oct. 27, will allow highly rated companies to tap the government for three-month loans that are crucial to their daily operations. This is good news for cash-strapped companies that have been struggling for more than a month to find financing for longer than just one day.

We'll see how rates react to this new facility.

Source: Federal Reserve