Hi,

On Federal Holidays, such as Columbus Day and Veteran's Day, days when
the fixed income market is closed, do issues of commerical paper
trade? Do dealers have the ability to actually trade these pieces,
even though fixed income market is closed? A clearing house indicates
that CP can trade on federal holidays but this makes no sense. Who are
they trading with when no one is on a fixed income desk.

Please indicate your source for your reply.

CP issuers will actually move the settlement date to a non-federal
holiday.  In this case, you won't have any CP mature on that date.  In
terms of the clearing house, I am not sure what you are going to
settle when there's no CP that has a federal holiday settlement date.

Hi,


Thanks for the comment. What I don't get is that my clearing house
tells me that even though it is a Federal Holiday that CP actually
trades. As a result there is an update to the mark-to-market value on
a Fed Holiday. I really find this hard to believe. My clearing house
isn't the most smartest palce on the street. I was hoping to source a
document that I can reference to tell them that ti doesn't, rather
than me just syaing it doesn't trade on Fed Holidays.

Thanks.

The information that I provided you is the practice for major traing
desks in US.  If they really want a reference, try
http://www.bondmarkets.com/story.asp?id=2106