Fed auctions $28.77b in T-bills to ease credit problems

By JEANNINE AVERSA AP Economics Writer

WASHINGTON (AP) - The Federal Reserve has auctioned $28.77 billion in safe Treasury securities to big investment firms, part of an ongoing effort to ease credit problems.

The auction - the sixth of its kind - was held Thursday and drew bids less than the $50 billion being made available.

In exchange for the 28-day loan of Treasury securities, bidding firms can put up more risky investments, including certain shunned mortgage-backed securities and bonds backed by federally guaranteed student loans, as collateral.