Instead, he argued that Moretti was “trying to mask” the real reason for the bond offering: the fact that the commercial-paper market “is quite sensitive these days and is drying up for some heretofore stellar corporate credits that are then required to fund in the longer-term credit markets.” Gross pointed out that “a lack of market discipline” had allowed GE Capital to have three times more commercial paper outstanding than it had credit lines to back it up. Typically, a company had backup bank lines equal to its outstanding commercial paper, just in case.
