Thursday, October 02, 2008

AT&T: Trouble With Its Commercial Paper

You want to screw the bastards who dreamed up CDOs, MBSs, and swaps? Fine.

But cutting off liquidity to do it?

AT&T Inc. (T, Fortune 500) Chairman and CEO Randall Stephenson said Tuesday that his company was unable to sell any commercial paper last week for terms longer than overnight. Commercial paper, which helps lubricate the flow of business operations, is a short-term IOU available to corporations that banks usually know are good for the money.

It's not that short-term borrowing is unreasonably expensive, Stephenson said. A shortage of buyers for the debt means such borrowing is not as readily available as it had been even three weeks ago, he said.

"It's loosened up a bit, but it's day-to-day right now. I mean literally it's day-to-day in terms of what our access to the capital markets looks like," Stephenson said. AT&T spokesman Larry Solomon said later that as of Tuesday, the company has ready access to the commercial paper market at reasonable rates and various terms.

But as a result of the recent volatility, managers at the Dallas-based phone company are more cautious.

Nice to know that AT&T can once again sell its paper for more than 1 day at a time.

AT&T, for crying out loud...

HT: RedStates

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