BMO Capital Markets is restructuring Fairway Finance, its nearly 10-year-old asset-backed commercial paper conduit, implementing changes that will allow it to issue ABCP in pounds, sterling and euros. Currently, the multiseller vehicle issues ABCP only in dollars.
The changes parallel the bank's recent efforts, during the last six months, to expand its scope to foreign markets, including China, Mexico and Europe. "We view China and Mexico as emerging securitization markets," Jeff Phillips, executive managing director of BMO Capital Markets said, adding that the move is not necessarily geared toward chasing higher yields. "We think that we can enter the European market with a view toward our niche of the more highly structured transactions and esoteric asset types."
At press time, the bank was preparing transactions in all three jurisdictions, including debt secured by infrastructure loans, middle market loans and consumer receivables. Those deals are slated to close by mid-March, Phillips said.
Launched in 1997, Fairway Finance currently has $10 billion in commitments for its ABCP, with $7.5 billion outstanding. The partially supported vehicle maintains P-1/A-1 ratings from Moody's Investors Service and Standard & Poor's, respectively.
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