Business news for Fri, 21 Dec 2007 & with words billion+commercial. 5 news.

WASHINGTON - The Federal Reserve, working to combat the effects of a severe credit crunch, announced Friday it had auctioned another $20 billion in funds to commercial banks at an interest rate of 4.

SAN FRANCISCO (MarketWatch) -- Fitch Ratings put Eaton Corp. on Rating Watch Negative Friday after the company said it planned to acquire Moeller Group and Phoenixtec for a total of about $2.8 billion. Fitch currently maintains A ratings on Eaton's issuer default, senior unsecured bank facilities, and senior unsecured debt. The ratings agency also maintains an F1 rating on the company's short-term issuer default and commercial paper. Fitch said Eaton has about $3.1 billion in debt as of Sept. 30. The ratings agency said the negative watch reflects risks of integrating the acquisitions that could put pressure on margin improvement and expected cash flow.

The Federal Reserve, working to combat the effects of a severe credit crunch, announced Friday it had auctioned another $20 billion in funds to commercial banks at an interest rate of 4.67 percent. Fed officials pledged to continue with the auctions "for as long as necessary."

LONDON (MarketWatch) -- U.K. insurer Friends Provident has froze its 1.2 billion pounds ($2.4 billion) flagship commercial property fund after a rush for the exit by investors over the past three weeks, The Times (of London) reported, citing a spokesman. Friends' move affects up to 118,000 individual investors in its 24-year-old property fund, which invests in offices and retail developments in areas as diverse as Glasgow, Leadenhall Street in the City of London and Camden Wharf in North London. New Star Asset Management separately marked its property fund down by 8.2% last week, the report added.

The crisis in the commercial property investment market deepened last night as Friends Provident froze its £1.2 billion flagship fund after a rush for the exit by investors over the past three weeks.