Company borrowing through short-term IOUs has shrunk to the lowest level since 2012 as money-market funds continue to pull back amid low yields due to the Federal Reserve's easy money policy.
The seasonally adjusted amount of U.S. commercial paper decreased for a fifth straight week to $964 billion outstanding in the period ending Wednesday, according to Federal Reserve data. Corporations sell commercial paper, typically maturing in 270 days or less, to fund everyday activities such as rent and salaries.
Declining demand from money-market funds, among the biggest buyers of the debt, is curbing commercial-paper sales. Total assets in the funds have fallen by $100 billion this year to $2.6 trillion on May 13, according to the Investment Company Institute. The total has dropped from $2.7 trillion on Dec. 31, the highest level since June 2011.
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