Barely skipping a beat, origination in the ABCP market was robust last month, with several conduits substantially increasing program size. Outstandings in the market increased approximately $22 billion, or 3.3% to $691 billion, according to the Federal Reserve.
Overall commercial paper outstandings also increased approximately $9 billion, its first gain since April, which corresponds to recent demand for short-term investments. In August, the overall CP market had fallen approximately $40 billion. Asset-backeds now account for just less than 49% of the entire commercial paper market.
Through several transactions, General Electric Capital Corp.'s Edison Asset Securitization, the market's largest conduit, increased capacity to nearly $40 billion in size, according to a report put out by Moody's Investors Service.
Also notable, Ford Motor Credit's ABCP program FCAR is nearing its capacity, demonstrating the issuer's increased securitization activity, finding it cheaper than accessing the unsecured debt markets. FCAR had increased its capacity to $10 billion from $1.5 billion just a few months back, and is likely to increase again (see ASR 7/16/01). Further, it's said the company has been actively selling into the multi-seller conduit as well.
Interestingly, a $4 billion co-purchase facility was set up to accommodate one mortgage issuer's refinancing activity. The conduit is designed to finance conforming mortgages for the short time between origination and sale to the Agencies.
"The message is that even after Sept. 11, the ABCP market is still going, and still active and doesn't seem to have stopped growing," said Sam Pilcer, who heads Moody's ABCP group. Pilcer was sure to add that the terrorist attacks, though temporarily dispersing Moody's analysts throughout the tri-State region, has not impeded the agency's ability to rate transactions.