GECC remained the focus in the primary market as the company filed a $50 billion shelf just a week after its $11 billion deal. GECC said that it was looking to decrease its reliance on the commercial paper market and that it would be tapping the public markets again to term out CP. GECC spreads have suffered as a result with the new deal underwater by about 15-20 bp across the various tranches; this is significant underperformance and volatility for a AAA asset. More importantly, however, the GECC move raises the question of whether other financial companies will take measures to reduce their commercial paper funding and whether this will affect the technicals in the corporate bond market. A big part of the corporate bond supply story in 2001 was the big reduction in non-financial commercial paper; should the financial sector follow in 2002, supply may meet or exceed last year's record levels.
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