Mitsui applies for Fed CP aid

Trading house Mitsui & Co. has applied to the U.S. Federal Reserve's commercial paper-buying program to raise dollar-denominated funds for its operations in that country, banking industry sources said Sunday.

The Fed appears to have already purchased Mitsui CPs, the sources said. The company has so far had few problems in its fundraising capacity, but it became the first Japanese company that applied for the program designed to ease the credit crunch, they said.

Mitsui usually has its U.S. subsidiary Mitsui & Co. (U.S.A.) Inc. issue commercial paper — unsecured obligations issued by business entities for raising short-term funds — to the tune of several hundred million dollars a year to be used in U.S. operations.

But CP issuance costs have risen as a result of the credit crunch. Under the program, the Fed purchases three-month unsecured and asset-backed commercial paper issued to raise vital funds for day-to-day business operations at companies.