Fitch: U.S. Commercial Paper Market Rebounding in 2004.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has released a new report examining the state of the U.S. commercial paper (CP) market, focusing on volume and rating activity through the first half of 2004. Continued progress in several fundamental areas, most notably marked earnings growth and visible gains on the economic front, have paved pave tr.v. paved, pav·ing, paves 1. To cover with a pavement. 2. To cover uniformly, as if with pavement. 3. To be or compose the pavement of. the way for the latest positive credit trends in the CP market, particularly in the U.S. Among Fitch fitch: see polecat. rated global CP issuers, downgrades and upgrades finished the first half of 2004 practically equal, a notable improvement from the ratio of 12:1 -- downgrades to upgrades -- recorded in 2003. The progress was even more pronounced when looking exclusively at Fitch U.S. CP issuer ratings, as upgrades outpaced downgrades by a margin of 1.4 to 1 in the first half, reversing a deep cycle of rating erosion firmly in place since 2000. On the volume front, Federal Reserve (Fed) data of U.S. CP market activity during the first half of 2004 appeared tame. However, when the first half of this year is compared to the steady decline in U.S. CP dating back to early 2001, the significance of a 1.6% increase in outstanding CP since year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2003 is quite promising. 'All the more significant, the positive 16% rise in nonfinancial CP total outstanding by the end of the first half of 2004 provides strong evidence of the improving economic and credit climate and renewed interest in CP' said Charlotte Needham, Director, Credit Market Research, Fitch Ratings. More recently, outstandings of U.S. CP have continued to rise, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the Federal Reserve, at the end of August, total U.S. CP climbed 3.5% from December 2003 levels. Additionally, nonfinancial CP outstanding volume at the end of August climbed 24.7% from the year-end 2003 low of $101.4 billion. Industrial issuers are clearly returning to the CP market to fund growing working capital needs. "Despite the near term activity growth, nonfinancial and financial CP levels remain off late 2000 highs, as corporate balance sheets still brimming brim n. 1. The rim or uppermost edge of a hollow container or natural basin. 2. A projecting rim or edge: the brim of a hat. 3. A border or an edge. See Synonyms at border. with cash continue to satisfy interim funding needs," said Mariarosa Verde, Managing Director, Credit Market Research, Fitch Ratings. The inexpensive issuance of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. bonds and more recently, the reemergence of the bank loan market have facilitated a major portion of corporate financing requirements. 'U.S. Commercial Paper Market on the Rebound' is available on the Fitch Ratings web site at 'www.fitchratings.com' under 'Credit Market Research'. |
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