The market for corporate borrowing through U.S. commercial paper fell for a seventh week, led by a drop in issuance from domestic financial institutions to the lowest level in at least a decade, as companies turned to the bond market with rates at record lows.
The seasonally adjusted amount of U.S. commercial paper dropped $21.2 billion to $943.6 billion outstanding in the week ended yesterday, the seventh straight weekly decline, the Federal Reserve said today on its website. That's the longest stretch of decreases since the period ended Oct. 19, 2011, and the lowest level since the market touched $939.9 billion May 2, according to Fed data compiled by Bloomberg.
Borrowers are seizing advantage of unprecedented low interest rates to sell longer-term company bonds, while money-market funds' demand for short-term IOUs has been reduced by concern that Europe's debt crisis may damage credit quality globally, making it more difficult for companies to repay these obligations.
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