The company was able to raise short-term paper at very low interest rates, which lowered its overall cost of borrowing.
Or to buy short-term paper issued by off-the-balance-sheet financial units of major banks that were not transparent to the investment community.
What if you sell and reinvest in short-term paper yielding only 2%?
The European Financial Stability Facility announced an expanded funding profile Wednesday, with plans to start selling short-term paper with three-, six- and 12-month maturities.
FORBES: EFSF To Sell Short-Term Paper As Part Of Bailout Funding
The less charitable interpretation is that the central bank has softened the penalty for banks that have funded purchases of very illiquid assets with short-term paper.
You can get the currency exposure either by purchasing short-term paper issued by the flaky government in question or by taking a long position in the futures market for that currency.
That is, the interest rate on Argentinean short-term paper, or the price of the peso on the forward market, reflects the risk of a surprise devaluation that will cost you a chunk of your capital.
The credit rating agency referenced the December 3 offer by the Greek government to private investors to participate in a Dutch auction to exchange their sovereign bonds for short-term paper issued by the European Financial Stability Facility (EFSF).
FORBES: Greece In Default Once Again On Troika-Imposed Bond Buyback, S&P Says
The rate cut may have been intended to help reduce the cost of this borrowing, and to ensure that less-healthy firms already squeezed out of markets for longer-term corporate debt were not shut out of short-term paper and, crucially, forced to turn to the banking sector.
But as long as such high returns are available on short-term government paper, even a tax break may not make longer-term, riskier investments look sufficiently appetising.
But it is too soon to tell whether the vehicle will ever be restored to its former pre-credit-crunch glory, when it was able to issue short-term commercial paper to fund its investments in asset-backed securities.
The central bank is also trying to woo money by fiddling with regulations: on August 24th it allowed foreigners to invest freely in short-term government paper.
On the other hand, the European central bank has given European banks billions of no-cost three-year loans and guess what, some of those banks have been using that money to buy newly issued short-term government paper.
FORBES: Nothing Has Changed, But Bulls Are Becoming More Bullish
But while Immelt has taken major steps toward shoring up the company's balance sheet, including slashing its reliance on short-term commercial paper and reducing risky real estate loans, GE is still vulnerable to rising interest rates and unwelcome scrutiny from regulators.
The company, which makes screens for Apple's iPad and iPhone, needs to shore up cash to roll over as much as 360bn yen of short-term commercial paper and will need another 200bn yen to cover a maturing convertible bond in September 2013.
Known as conduits, these special-purpose vehicles borrow in the short-term, commercial-paper market to make acquisitions of highly rated paper in American asset-backed securities, and have been walloped by the plunging value of those assets since the frailty of subprime loans were exposed.
The hope is that investors will buy into this fund, and it will unfreeze the short-term asset-backed commercial paper market.
Money market funds invest in short-term fixed-income securities or commercial paper from governments, financial institutions and corporations.
The economy ministry also hopes to cut its interest burden by strong-arming pension funds (over sour looks from the big rating agencies) to swap short-dated government paper for long-term bonds.
In recent months the company has raced to reduce its reliance on short-term debt, particularly commercial paper that it could no longer place in the market.
Until the Great Recession, the Fed limited its purchases of Treasury paper to short-term bills that carry no interest rate risk.
These include the stockmarket, the bond market (government and corporate) and the money market for short-term securities, such as commercial paper.
On Tuesday the U.S. central bank said it would begin purchasing the short-term corporate debt known as commercial paper from American issuers.
On Tuesday the Federal Reserve said it would begin purchasing the short-term corporate debt known as commercial paper from American issuers.
The costs of issuing commercial paper, a form of short-term debt heavily used by companies in America, will fall once a Fed facility for purchasing commercial paper is up and running on October 27th.
ECONOMIST: Meltdown may have been averted. But the crunch is not over
This has come as a huge relief to chief financial officers, who barely a year ago were having to make do without a fully functioning market for commercial paper (short-term loans to finance operating expenses).
Corporations sell commercial paper, a short-term IOU, to fund day-to-day activities like payroll.
After the markets closed Monday, Fitch Ratings downgraded AIG's long-term and short-term issuer default rating, as well as its senior unsecured debt and commercial paper program ratings.
Our research consistently demonstrates that short-term (five year maturity or less) paper has historically a much better risk-return tradeoff than long-term bonds.
This is clear from the performance of the commercial-paper market, another short-term asset class that rarely hits the headlines, where rates suddenly hit six-year highs last week.
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