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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: TobagoJack who wrote (35304)6/23/2003 11:30:58 AM
From: energyplay  Read Replies (1) of 74559
 
Hi Jay - Commercial paper market has already been declining. Many company CFO have taken advantage of lower interest rates on long term money to reduce exposure to commercial paper.

Very important to note that almost all commercial paper comes from AAA, AA or A rated companies - mostly AA. While these companies will miss the lower cost money, they tend to be big, liquid, and smart enough that this will not be a problem.

I expect that banks will step into this market, making longer term loans (1 year) to the companies, and financing short term (3 months) with commercial paper, and earning the spread.

Best regards, energyplay
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