Asset-Backed CP show some stress

--three issuers took advantage of the Home Mortgage Investment, Luminent Mortgage Capital are in distress because of their mortgagte investments. So they are extending loan maturities to address liquidity problems. --CP offers maturities on average of about 30 days. A cheap alternative to bank loans. Rates in this market have risen following the credit market's turmoil. --AB CP accounts for more than half of the $2.2 trillion of CP outstanding at the end of July. AP CP is used by companies such as mortgae lenders and auto makers. A mortgage lende typically secures an AB CP line with a pool of home loans that it holds. --Moody's Investors Service is reviewing for a possible downgrade its top-notch rating for American Home's exptendible CP program of about $1.54 bil. the mortgage lender extended about $150 million of AB CP taht was due to mature monday. The extended paper reaches final maturity 120 days after the date of the extension. --Commercial paper is bought by money market funds, mutual funds that invest in short-term debt securities and hold moneyfor everything from individual savings to the coffers of Standard& Poor's 500 companies. The cash from money market accounts is lent to entities such as those owned by American Home and Luminent to buy mortgages, bonds, credit card and trade receivables as well as car loans. Extendible notes allow the issuer to delay repayment for as long as 397 days, the maximum U.S. money market funds may hold. --extendible AB CP yields rose from 5.75% to 5.95%, unextendible AB CP 5.25%, Corporate CP 5.3%