Bloomberg writes "​Lampert'​s Hedge Fund Buys Junk-​Rated Paper From Lampert'​s Sears", which says, "Sears Holdings Corp. is bypassing barriers to junk-​rated companies in the $​1.​1 trillion commercial-​paper market by selling the debt to its largest stockholders, including Chairman Edward Lampert. Lampert and his hedge fund, ESL Investments Inc., bought $​150 million of 30-​day commercial paper from a Sears subsidiary in March, the Hoffman Estates, Illinois-​based retailer disclosed in its annual proxy filed April 6.... Companies such as Sears Roebuck Acceptance, whose debt rating from Standard & Poor'​s is four notches below the minimum level for money-​market holdings, are often shut out of the commercial-​paper market. According to U.​S. Federal Reserve figures released April 8, there was about $​883 billion of top-​rated commercial paper outstanding and $​39 billion of debt with the second-​highest grade. The remaining $​168 billion of commercial paper outstanding consists of securities '​ineligible' for purchase by money-​market funds, according to the Fed." Bloomberg quotes Peter Crane, president of Crane Data LLC, a Westborough, Massachusetts, money-​market research firm, "Junk commercial paper is an oxymoron." The piece adds, "​In response to the September 2008 collapse of the $​62.​5 billion Reserve Primary Fund, the SEC tightened restrictions on money-​market investments in January, requiring funds to hold at least 97 percent of their assets in the highest-​rated paper."

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