SOURCE: Bloomberg

Yields on commercial paper rose as the Federal Reserve began buying the debt directly from companies, showing the central bank's efforts to unfreeze short- term credit markets have yet to take hold.

Rates on the highest-ranked 30-day commercial paper, which many corporations use to finance their day-to-day operations, jumped 25 basis points to 2.88 percent, according to yields offered by companies and compiled by Bloomberg.

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SOURCE: CNNMoney.com

The Federal Reserve started buying so-called commercial paper on Monday to jumpstart a critical but faltering lending market used by banks and big businesses.

To boost the $1.45 trillion pool of money - which was about $2 trillion a year ago - the Fed has begun buying high-quality commercial paper with a maturation period of three months. The program, known as the Commercial Paper Funding Facility (CPFF), will continue through the end of April 2009.

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SOURCE: Associated Press

Disappearing jobs, burrowing consumers and skittish companies are reasons for the Federal Reserve to lower interest rates and brace the tottering economy.

Fed Chairman Ben Bernanke and his colleagues open a two-day meeting Tuesday afternoon — their last before the November elections — to make a fresh assessment of economic and financial conditions and decide their next move on rates. Their decision will be announced Wednesday.

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SOURCE: Steelhead Capital

There are signs of more deals beginning to look possible, with several of our top lenders expressing cautious optimism regarding the availability of funds for commercial loans. In particular, multi-family primary markets are still remaining active, with an increase in qualified borrowers and loan requests just in the past week.

"We saw an influx of solid apartment loan requests after the market rebounded some, and quite a few less deals that were unqualified," commented Joe Terry from BMC Capital, one of Steelhead's top affiliate partners.

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SOURCE: Wall Street Journal

According to WSJ's article today ommercial real estate is heading into the danger zone as office vacancies rise, stores close and hotel bookings fall.

Commercial real-estate values have fallen since the beginning of the credit crunch, by as much as 20%, due to more expensive and less available financing. Financial institutions have already taken more than $15 billion in commercial property-related write-downs this year.

But unlike the early 1990s, the commercial market hasn't suffered years of overbuilding. Defaults on commercial real-estate debt remain less than 1%, compared with more than 10% at the worst point of that earlier collapse. Rents and vacancy rates have so far remained solid, enabling most properties to pay their debt service.

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SOURCE: CNN Money

Frozen pipelines show signs of a thaw as the overnight and 3-month bank-to-bank rates edge lower. Treasury prices churn.

The credit markets showed further signs of improvement Thursday, as bank-to-bank lending rates eased further away from recent highs but there is still a long way to go before breaking out the champagne.

Another key form of lending to major businesses and banks, known as commercial paper, remained tight with the market contracting for five straight weeks. Total outstanding commercial paper fell 2.6% in the last week and, while that was another drop, the pace of the decline was easing.

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SOURCE: Commercial Property News

September usually sets the pace of the investment market through the end of the year, and if this September is any indication, the property markets are in for some troubling times, according to Real Capital Analytics’ Global Capital Trends September/October 2008 report.

“The credit crunch that has been impeding deal flow in the U.S. and Europe is now spreading throughout Asia and erupting into a full-blown financial crisis in the West,” the report indicated. “In the course of the month, some of the largest lenders to the commercial real estate industry have fallen: Lehman, Hypo, Wachovia, Fortis, AIG, HBOS, Merrill Lynch. Their downfall not only leaves a void for those seeking to finance a property, but represents tens of billions of dollars in property and mortgages that must be liquidated. Those assets will join tens of billions of other properties currently for sale by owners that are under increasing financial pressure.”

Sales of significant commercial properties worldwide totaled $388 billion through August, representing a 57 percent decrease compared to same period in 2007, the report stated. The pace of transactions continues to slow and preliminary data for the third quarter shows an even steeper decline of 64 percent from the third quarter 2007.

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SOURCE: MarketWatch

Another major development in the capital markets today leading towards what we can only hope will be a more stable enviroment ahead...

Wells Fargo & Co. and Wachovia Corp. agreed to a $15 billion merger that highlights the buyer's strong balance sheet and aspirations to expand its presence in the eastern U.S.

San Francisco-based Wells Fargo, one of the nation's largest commercial mortgage lenders, has mostly avoided the crushing impact of the collapsing real-estate market and subsequent credit crisis by eschewing some of the riskiest lending practices that wrecked rivals and other financial-services firms.

Wells Fargo said it will take $10 billion in charges to put Wachovia's troubled assets on its own balance sheet at fair value, while issuing up to $20 billion of securities, primarily in the form of equity, to beef up its balance sheet.
Wachovia said its board approved Wells Fargo's offer Thursday night.

"This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support," said Wachovia CEO Robert Steel.

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