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Tier 1 issuers accept a deeper discount to access the Fed facility; as of last week, the funding facility was accepting paper at a discount rate of 1.21%, while Tier 1 nonfinancial paper in the regular market was going at a discount of 21 bps and Tier 1 financial paper at 51 bps. But the funding facility’s pricing looks attractive to Tier 2 issuers; AFP calculates that Tier 2 companies are paying 2.12% more to issue 90-day paper than Tier 1 companies.

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