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Board of Governors of the Federal Reserve System
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Board of Governors of the Federal Reserve System

Monthly Report on Credit and Liquidity Programs
and the Balance Sheet

June 2009 (927 KB PDF)

Other Lending Facilities: Commercial Paper Funding Facility (CPFF)

Recent Developments

  • A significant portion of maturing paper in the CPFF over recent weeks has not been rolled over.
  • Improvements in market conditions may have allowed some borrowers to obtain financing from private investors in the commercial paper market or from other sources.

Background

The CPFF is a facility, authorized under section 13(3) of the Federal Reserve Act, that supports liquidity in the commercial paper markets. The CPFF provides a liquidity backstop to U.S. issuers of commercial paper through a specially created limited liability company (LLC) called the CPFF LLC. This LLC purchases three-month unsecured and asset-backed commercial paper directly from eligible issuers. The FRBNY provides financing to the LLC, and the FRBNY’s loan to the LLC is secured by all of the assets of the LLC, including those purchased with the cumulated upfront fees paid by the issuers.

Table 15. CPFF--Concentration of Largest Issuers
For the four weeks ending May 27, 2009

Rank Number of borrowers Daily average borrowing
($ billions)
Rank by amount of commercial paper (CP)
Top five issuers 5 57
Next five issuers 5 29
Other issuers 47 73
Total 57 159
Note: Amount of commercial paper held in the CPFF that was issued by the top five and the next five issuers on each day. Components may not sum to total because of rounding.

The CPFF was announced on October 7, 2008 and is administered by FRBNY, and the assets and liabilities of the LLC are consolidated onto the balance sheet of the FRBNY. The net assets of the LLC are shown in tables 1, 9, and 10 of the H.4.1 statistical release, and primary accounts of the LLC are presented in table 7 of the H.4.1. The Federal Reserve Board has authorized the extension of credit from the CPFF through October 30, 2009.

Table 16. CPFF Commercial Paper Holdings by Type
As of May 27, 2009

Type of commercial paper Value ($ billions)
Unsecured commercial paper
Issued by financial firms 52
Issued by nonfinancial firms *
Asset-backed commercial paper 94
Total 147
Note: Components may not sum to total because of rounding; does not include $4 billion in accumulated earnings invested in other liquid assets.
* denotes less than $500 million. Return to table

Table 17. CPFF Collateral by Rating
As of May 27, 2009

Type of collateral Value ($ billions)
Commercial paper with rating1
A-1/P-1/F-1 143
Split-rated 3
Downgraded after purchase *
Total 147
Note: Components may not sum to total because of rounding; does not include $4 billion of other investments.
1. The CPFF purchases only U.S. dollar-denominated commercial paper (including asset-backed commercial paper (ABCP)) that is rated at least A-1/P-1/F-1 by Moody's, S&P, or Fitch, and, if rated by more than one of these rating organizations, is rated at least A-1/P-1/F-1 by two or more. "Split-rated" is acceptable commercial paper that has received an A-1/P-1/F-1 rating from two rating organizations and a lower rating from a third rating organization. Some pledged commercial paper was downgraded below split-rated after purchase; the facility holds such paper to maturity. Return to table
* denotes less than $500 million. Return to table

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Last update: August 2, 2013