February 22, 2018 / 3:42 PM / a month ago

UPDATE 1-U.S. commercial paper supply records biggest weekly drop since July

 (Recasts lead, adds background)
    NEW YORK, Feb 22 (Reuters) - The amount of U.S. commercial
paper outstanding recorded its steepest one-week decline in
seven months this week, suggesting a further drop in short-term
corporate borrowing activity, Federal Reserve data showed on
    Companies sell these short-term debt to money market mutual
funds and other investors to raise cash to finance their
inventories and payrolls.
    The amount of U.S. commercial paper dropped in the week
ended Feb 21, Federal Reserve data showed on Thursday.
    U.S. seasonally adjusted commercial paper outstanding fell
$23.1 billion to $1.095 trillion in the week ended Feb. 21. That
was the biggest weekly decline since a $27 billion drop in the
July 6 week.
    At the end of January, total commercial paper outstanding on
a seasonally adjusted basis reached $1.139 trillion, the highest
since August 2011.
    Non-seasonally adjusted commercial paper outstanding - which
some analysts consider a more reliable reading than the
seasonally adjusted one since it has been distorted by the
financial crisis - fell by a more modest $4.4 billion to $1.109
    U.S. non-seasonally adjusted foreign financial commercial
paper outstanding fell $4.6 billion to $281.4 billion.

 (Reporting by Richard Leong; Editing by Bernadette Baum)
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