Tuesday, August 21, 2007
Now It’s Commercial Paper Instead of Hedge Funds and Sub-Prime
Apparently loans are bundled up and flogged to companies and financial institutions in special financing vehicles called “conduits” that are then sold to investors, such as money market funds, insurance companies or other banks, by issuing commercial paper, or bonds, which pay a coupon. Though apparently the punters have gone off them and now prefer short-term safe havens such as US government debt. Well I never, you learn something new every day.