by Calculated Risk on 1/22/2009 03:49:00 PM

From the Fed: The A2P2 spread as at 1.29. This spread has seen a huge decline in 2009. This is far lower than the record (for this cycle) of 5.86 after Thanksgiving, but still too high.

This is the spread between high and low quality 30 day nonfinancial commercial paper. Right now quality 30 day nonfinancial paper is yielding 0.25% and A2/P2 paper is yielding 1.54%. As the credit crisis eases, I'd expect a further decline in this spread, although this is progress.

There may be plenty of bad news, but this is definitely good news for companies that issue lower quality commercial paper.

As a reminder - see those three little bumps on the graph in 2007 and early 2008? Each of those bumps indicated a crisis in the credit markets - and now they barely show up on the graph!