Once a popular source of funding for bank lenders, loan-backed commercial paper conduits have quickly become the dinosaurs of the ABCP market, and should be nearly wiped out by year-end, sources said.

In September, Mellon Bank's $700 million Sweetwater Capital Corp. is scheduled to terminate, at which point the CP investors will be paid out, either through loans maturing or being bought out of the conduit by the sponsor. Following Sweetwater, Centric Capital Corp., a $2 billion loan-backed facility of Wachovia Corp., is set to wind down. Several other programs have already been closed this year, including Deutsche Bank's Citation Capital Inc. and Credit Lyonnais' Lyon Short Term Funding Corp.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.