Oct. 8--Rivulets of the $1.6 trillion commercial paper market run through some of the St. Louis area's biggest employers and best-known companies, including Anheuser-Busch, Ameren and AT&T.

With credit markets suffering through major disruptions stemming from a lack of confidence, the local implications are not yet clear.

Companies use commercial paper as a form of short-term debt to fund their operations -- buying raw materials, managing inventory and paying unexpected bills. Maturities range from a few days to nine months, averaging about 30 days. Many companies have found the paper -- scarfed up by money market funds looking for a place to park their cash -- to be a cheap alternative to bank loans.

The "CP" market is traditionally sleepy. Most trades are done electronically, and the market is usually sown up by 11:30 a.m. But in recent days, the market for commercial paper, built to supply cheap credit for companies, has tightened dramatically. Analysts fear financial gridlock and cash shortages in corporate America if the commercial paper market is not kick-started.

The amount of outstanding commercial paper peaked at about $2.2 trillion in August 2007, but it declined to $1.54 trillion on Oct. 1 as investors fled risk.

It adds up to a "tremendous picture of the dramatic decline of the commercial paper funding market," said Fred Dickson, chief market strategist at D.A. Davidson & Co. "Where the borrowing costs used to be virtually nil, now (companies are) paying huge premiums. The commercial paper market is essentially frozen or dried up."

Most local companies did not comment extensively on their use of commercial paper, but some have discussed it in filings with the Securities and Exchange Commission.

Anheuser-Busch Cos. had $597 million in commercial paper obligations on June 30. The country's biggest brewer classified the financing as long-term because it has ongoing support from a $2 billion revolving credit agreement. Anheuser-Busch's interest rate for commercial paper on June 30 was 2.37 percent.

St. Louis-based Sigma-Aldrich Corp. relies on commercial paper to supplement its cash from operations. The maker of fine chemicals and tools for scientific research had $362.9 million of commercial paper outstanding on June 30, more than double its balance six months earlier. Its weighted average interest rate at the end of June was 2.27 percent.

"We haven't had a problem" placing commercial paper, treasurer Kirk Richter wrote in an e-mail last week. Rates rose briefly, but less than one percentage point higher than usual, he said.