ECP shrinks further as uncertainties ratchet up

Outstandings in the European commercial paper market declined further this week despite the European Union and International Monetary Fund ‘shock and awe’ bailout package. Macro and market concerns — particularly investors’ reluctance to take exposure to borrowers from out-of-favour eurozone sovereigns like Portugal and Spain at current prices —limited new issues to $50.75bn equivalent by Thursday’s close. This compared with $51.64bn over the same period last week, when sentiment was already poor.