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The Federal Reserve's intervention in markets continues to expand dramatically as the U.S. central bank pulls out all the stops in order to ease the credit crunch. Its latest move is the creation of a special purpose vehicle that will purchase U.S. commercial paper, a key source of financing for corporations that has recently begun to freeze up along with most other credit markets.
The Fed invoked its emergency powers to set up the Commercial Paper
Funding Facility, which it said "will provide a liquidity backstop to
U.S. issuers of commercial paper through a special purpose vehicle that
will purchase three-month unsecured and asset-backed commercial paper
directly from eligible issuers."
The size of the vehicle was not released, but financing for it will come from the Fed. In the case of commercial paper that is not asset-backed commercial paper, up-front fees will be paid by the issuers. The commercial paper market has slowed over the past few weeks as investors increasingly eschew all but the safest of investments. Bloomberg reports that activity in the commercial paper market hit a three-year low of $1.6 trillion last week. - George White See Federal Reserve statement CategoriesComments
From: Sue Bernier,
I am a woman, multi-ethnic business owner. I have suffered great hardship during the passed several months due to non payment from my clients. I have had to ask employees to wait on paying their salaries as well as mine. I am looking for information on where to apply for the "commercial paper funding" loan. If anyone can give me any information on where to go, it would be greatly appreciated. Thanks in advance. Sue
Posted on:
October 13, 2008 3:40 PM
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I am in need of applying for "commerical paper loan", but in reading qualification and articals my credit rating has dropped due to the hardship which has occur these past 2 year. I have had to lay-off 2 employee and we are down to 3 employees. I am the majority holder of my business, hispanic and a woman. Can you advise as to where one can try to apply for a loan or has the "commerical paper" lower their standards? I have tried numerious internet resources but to no avail but have not stopped researching. Should this be out of the ordinary questions and no one can help, just one to thank you for reading it.
Have a great day :)
Dee