Citibank held onto its spot as the largest ABCP program administrator, with $83.9 billion in paper issued from its 13 programs at the end of the first quarter, according to Moody's Investors Service, which published its mid-year review of the ABCP market in late August. On the issuance side, European appetite for short-term funding, a higher utilization rate and market infatuation with repurchase agreements helped boost ABCP outstandings to a hearty $920 billion by the end of June.

The giant bank maintained a substantial lead over its competitors, with second-place finisher ABN Amro Bank completing the first quarter with $66.9 billion in ABCP outstandings from its nine programs. Moody's attributed the bank's performance to issuance from its $33 billion program, Amstel Funding. Finishing out the top five issuers of ABCP were JPMorgan Chase, with $44.2 billion; HBOS Treasury Services, with $38.9 billion; and Deutsche Bank, which had $31 billion in issuance.

The market's $920 billion in issuance at midyear translates to a $72 billion, or 8.5% increase in issuance, from the $848 million tallied at the end of 2005, according to the rating agency. On a year-over-year basis, ABCP issuance increased by $205 billion, or 28%, from $715 billion. While Moody's largely attributes the period-over-period growth to a boost in traditional and innovative program types, it noted that the market's growth came from several channels. Increases in repurchase agreements, short-term tranches of CDOs and single-seller programs accounted for 36% of the increase in outstandings.

Moody's also noticed that ABCP conduit administrators made more use of their programs' capacities and launched more programs than they closed. Utilization rates rose steadily over the past year and, for 2006, they peaked at 67% in the first quarter of 2006. Also, through the end of the second quarter, newly formed conduits, about 13, outpaced the number of programs that were dissolved. Such activity represents an about face from 2005, when administrators closed almost twice the number of programs that they launched.

European commercial paper now accounts for 42% of total ABCP issuance, and still represents an increasing share of new business overall. As of last June 30, ABCP outstandings issued by European, Middle East and African customers rose by about $45 billion to $375 billion, representing a 14% increase from year-end 2005.

The market's performance withstood some of the Federal Reserve Board's modifications, which added a number of new categories and reclassified some ABCP outstandings as unsecured commercial paper. As a result, about $100 billion in ABCP issuance was counted as commercial paper. While the modifications changed the amount of outstandings, it did not change the overall trend of growth in ABCP outstandings from year to year. Also, the Fed changes meant that the ABCP market contributed less to the overall CP market. While the amount of ABCP issuance accounted for a majority of the overall CP market at the end of June, its share declined to 52%, from 57%.

Aside from putting up healthy issuance, the field of administrators was slightly more fragmented. Although programs run by the top 20 administrators issued $603 billion in ABCP, which represented a 21% increase year-over-year, ABCP issued from administrators that fall outside that circle made up 40% of total issuance for the first quarter. That was up from 30% in the same period of 2005.

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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