Sources Of Liquidity Bolster Corporates' Position

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In your Oct. 8 online Credit Union Journal you attempt to raise concerns about corporate credit unions issuance of commercial paper. Since you mention Southeast Corporate as issuing commercial paper, we would like to respond with some facts that were not apparent in your story.

Your article stated, "Some corporates also sell their own commercial paper to investors in order to raise funds." Southeast Corporate has a $325-million commercial paper program that has been in place for several years. During this time of market turmoil only highly rated institutions are able to sell their commercial paper. At Southeast Corporate we are gratified and take it as a testament to our good name and sound financial position that we have been able to continue to sell commercial paper. In fact the day after Lehman filed for bankruptcy, we sold $32 million in commercial paper. We have had other sales of commercial paper since then, as investors execute a flight to safety.

Since what is happening in the markets is to a large extent a liquidity event, the fact that corporates have additional sources of liquidity such as commercial paper, serves to bolster our position as a liquidity resource for our member credit unions.

Gregory Wirthmann

SVP, Chief Investment Officer, CFA

Southeast Corporate Credit Union

Tallahassee, Fla.


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